The Art of Strategy (AIGA Head Heart Hand)

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This is my presentation from the AIGA Head Heart Hand conference on October 11, 2013.

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The Art of Strategy (AIGA Head Heart Hand)

  1. THE ART OF STRATEGY Nathan Shedroff California College of the Arts designmba.org (or: What I learned in business school)
  2. MAKE IT SO Interaction Design Lessons from Science Fiction by NATHAN SHEDROFF & CHRISTOPHER NOESSEL foreword by Bruce Sterling Many designers enjoy the interfaces seen in science fiction films and television shows. Freed from the rigorous constraints of designing for real users, sci-fi production designers develop blue-sky interfaces that are inspiring, humorous, and even instructive. By carefully studying these “outsider” user interfaces, designers can derive lessons that make their real-world designs more cutting edge and successful. “Designers who love science fiction will go bananas over Shedroff and Noessel’s delightful and informative book on how interaction design in sci-fi movies informs interaction design in the real world.... You will find it as useful as any design textbook, but a whole lot more fun.” ALAN COOPER “Father of Visual Basic” and author of The Inmates Are Running the Asylum “Part futurist treatise, part design manual, and part cultural analysis, Make It So is a fascinating investigation of an often-overlooked topic: how sci-fi influences the development of tomorrow’s machine interfaces.” ANNALEE NEWITZ Editor, io9 blog “Shedroff and Noessel have created one of the most thorough and insightful studies ever made of this domain.” MARK COLERAN Visual designer of interfaces for movies (credits include The Bourne Identity, The Island, and Lara Croft: Tomb Raider) “Every geek’s wet dream: a science fiction and interface design book rolled into one.” MARIA GIUDICE CEO and Founder, Hot Studio www.rosenfeldmedia.com MORE ON MAKE IT SO www.rosenfeldmedia.com/books/science-fiction-interface/ MAKEITSObyNATHANSHEDROFF&CHRISTOPHERNOESSEL Experience Design 1.1 a manifesto for the design of experiences by Nathan Shedroff product taxonomies 16 user behavior 116 100 years 22 information 42 takeaways 28 data 36 knowledge 48 subjectivity 78 consistency 96 navigation 84 product taxonomies 16 user behavior 116 experiences 4 experience taxonomies 10 100 years 22 wisdom 54 information 42 takeaways 28 data 36 knowledge 48 subjectivity 78 consistency 96 navigation 84 Design Strategy in Action Edited by Nathan Shedroff A publication from the MBA in Design Strategy program California College of the Arts 2011 2008 Edition Dictionary of Sustainable Management
  3. MBA IN DESIGN STRATEGY MBA IN STRATEGIC FORESIGHT MBA IN PUBLIC POLICY DESIGN
  4. WHERE IS “DESIGN” ON THE BALANCE SHEET? ASSET LIABILITY OWNER’S EQUITY
  5. WHERE IS “DESIGN” ON THE BALANCE SHEET? ASSET LIABILITY OWNER’S EQUITY
  6. STRATEGY
  7. Strategy (Greek “στρατηγία”—stratēgia, “art of troop leader; office of general, command, generalship”[1]) is a high level plan to achieve one or more goals under conditions of uncertainty. Strategy is also about attaining and maintaining a position of advantage over adversaries through the successive exploitation of known or emergent possibilities rather than committing to any specific fixed plan designed at the outset. —Wikipedia
  8. “a pattern in a stream of decisions” — Henry Mintzberg of McGill University
  9. Strategic management analyzes the major initiatives taken by a company’s top management on behalf of owners, involving resources and performance in internal and external environments.[1] It entails specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance
  10. Strategic management analyzes the major initiatives taken by a company’s top management on behalf of owners, involving resources and performance in internal and external environments.[1] It entails specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs.
  11. STRATEGY IS A HIGH-LEVEL PLAN (FOR ACTION)
  12. “DESIGN IS A PLAN FOR ACTION” Charles Eames
  13. STRATEGY IS ABOUT CONTEXT
  14. TACTIC STRATEGY
  15. TACTIC Usability/Legibility Aesthetics STRATEGY
  16. TACTIC Usability/Legibility Aesthetics STRATEGY Experience
  17. TACTIC Operational Effectiveness & Productivity Products & Services (Offerings) Features/Performance Price STRATEGY Intent, Goals, Mission, Vision, & Culture Systems Stakeholders (employees, investors, media, communities, etc.)
  18. TACTIC How to make, deliver, and support the best <offering> possible STRATEGY What we should be in the business of (to begin with)
  19. TACTIC How to make, deliver, and support the best <offering> possible STRATEGY What we should be in the business of (to begin with) THE ORGANIZATION THE PRODUCTS
  20. EXPERIENCE CREATES VALUE
  21. EXPERIENCE CREATES VALUE
  22. EXPERIENCE CREATES VALUE
  23. EXPERIENCE CREATES VALUE
  24. BUSINESS MODELS ARE DESIGNABLE
  25. A B C
  26. A B C 3 4 5 F F2 F8 D 6 G 1 2 E 101 44 89 10616
  27. You’re holding a handbook for visionaries, game changers, and challengers striving to defy outmoded business models and design tomorrow’s enterprises. It’s a book for the… written by Alexander Osterwalder & Yves Pigneur co-created by An amazing crowd of 470 practitioners from 45 countries designed by Alan Smith, The Movement
  28. The Business Model Canvas Cost Structure Key Partners Key Resources Channels Key Activities Value Proposition Customer Relationships Customer Segments Revenue Streams www.businessmodelgeneration.com
  29. www.cca.edu/academics/graduate/design-mba/open DELIVERYRESOURCES OFFERPRODUCTIONORGANIZATION DESIGN NETWORK/ STAKEHOLDERS FINANCE INTENT EXPERIENCE BRAND VALUE VALUE INTENT EXPERIENCE OFFER DELIVERY PRODUCTION RESOURCES NETWORK/ STAKEHOLDERSFINANCE ORGANIZATION DESIGN VALUE NEEDS TACTICS/IMPLEMENTATION (INDUSTRY CONTEXT) CUSTOMER (MARKET CONTEXT) STRATEGY (VISION) Customers, Media, Community, etc.)? • How do we manage, maintain, and grow our networks? • Who are our competitors? • Who will resist our success? • Do we have unique production expertise? • What do we already produce? • What do others produce? • What are the strengths, weaknesses, and risks in our supply chain? data from each area (in appropriate ways): • Who are our customers? • What are their needs? • How do we meet them? • What do they respond to? • What are our communication channels? • Who needs to know (internally)? • Who needs to know (externally)? • What are our messages? CCA LEADING BY DESIGN FELLOWS PROGRAM & SMALL BUT MIGHTY
  30. Your Company customers (end users) NGOs media community (geographic) partners labor unions retailers local government wholesalers the Environment industry trade associations employees distributors regional government courts suppliers & manufacturers insurers & reinsurers shareholders banks investors institutional investors competitors Your Company customers (service providers)
  31. STRATEGY TOOLS
  32. Strengths Weaknesses Opportunities Threats
  33. Strengths: • We’re us • We’re great • We know stuff • We’re fast • We’re easy to use! Weaknesses: • We work too much • We care too much • We’re perfectionists Opportunities: • Own the market • Expand product lines • Make more stuff • License stuff • Co-brand with Disney • Create an “experience” Threats: • Others can get fast • Others can be easy to use • Someone gets to Disney before us • We don’t have a “big data” strategy!
  34. Strengths: • We’re us • We’re great • We know stuff • We’re fast • We’re easy to use! Weaknesses: • We work too much • We care too much • We’re perfectionists Opportunities: • Own the market • Expand product lines • Make more stuff • License stuff • Co-brand with Disney • Create an “experience” Threats: • Others can get fast • Others can be easy to use • Someone gets to Disney before us • We don’t have a “big data” strategy!
  35. ENVIRONMENTAL ANALYSIS Social Issues: Customer Needs and Wants Political Issues: Legal, Regulations... Tech. Issues: Technology trends, opps... Economic Issues: Market trends, opps... Industry-Specific Issues: shifts in resources, knowledge, practices, etc...
  36. ENVIRONMENTAL ANALYSIS • Customers seek clarity • Customers are afraid of technology • RIM is out, HTML5 is in • Lending is slowing • Customers worried about their future • Mobile, social, global, local, etc.
  37. COMPETITIVE ANALYSIS • Clarity • Fear of technology • HTML5 • Loan Help • Reassuring X X X X √ √ √ √ X X X X X √ X X X √ X X √ √ X X X
  38. Strengths Weaknesses • Clarity • Fear of technology • HTML5 • Loan Help • Reassuring
  39. Strengths Weaknesses Opportunities (Biggest Strengths vs. Biggest Weaknesses) Threats (Biggest Weaknesses vs. Biggest Strengths) • Clarity • Fear of technology • HTML5 • Loan Help • Reassuring
  40. Better Worse Smaller Bigger
  41. Better Worse Smaller Bigger Hey! A Blue Ocean Strategy!
  42. For <target customers> that <need/ care about> , our <product, service>, company> is a solution that <benefit> . Unlike, <our competitor> , our <product, service>, company> is <unique differentiator> . POSITIONING STATEMENT
  43. POSITIONING STATEMENT For Professor Plum that needs to kill someone , our noose is a solution that is silent . Unlike, Miss Scarlett’s , our noose is purple .
  44. Our customers want the most features possible in a fast , inexpensive application delivered in the cloud . MADLIBS OF DESIGN
  45. Where to start: • Who is your audience really? • What is their life life, what do they need, what do they want? • What value is being provided to them and what kind of value can you realistically provide? • How can you differentiate yourself based on this value? • What’s it going to take to be successful? • Are you ready? Is it worth doing? • Do you have the right people (who do really need)? Do you have the right culture?
  46. The Business Model Canvas Cost Structure Key Partners Key Resources Channels Key Activities Value Proposition Customer Relationships Customer Segments Revenue Streams
  47. The Business Model Canvas Cost Structure Key Partners Key Resources Channels Key Activities Value Proposition Customer Relationships Customer Segments Revenue Streams
  48. NEEDSOFFER EXPERIENCE INTENT VALUE
  49. NEEDSOFFER EXPERIENCE INTENT VALUE CUSTOMER’S EXPERIENCE ORG. DESIGN RESOURCES DELIVERYPRODUCTION NETWORKFINANCE ORGANIZATION’S EXPERIENCE
  50. RELATIONSHIP
  51. EXPERIENCE RELATIONSHIP
  52. VALUE EXPERIENCE
  53. TOTAL VALUE EXPERIENCE
  54. TOTAL VALUE FUNCTIONAL VALUE + FINANCIAL VALUE + EMOTIONAL VALUE + IDENTITY VALUE + MEANINGFUL VALUE =
  55. FUNCTIONAL VALUE + FINANCIAL VALUE + EMOTIONAL VALUE + IDENTITY VALUE + MEANINGFUL VALUE = QUANTITATIVE TOTAL VALUE
  56. FUNCTIONAL VALUE + FINANCIAL VALUE + EMOTIONAL VALUE + IDENTITY VALUE + MEANINGFUL VALUE = QUANTITATIVE QUALITATIVE TOTAL VALUE
  57. QUALITATIVE VS. QUANTITATIVE
  58. QUALITATIVE AND QUANTITATIVE
  59. CLV = GC • - M •∑ i = 0 n (1 + d) i r i ∑ i = 1 n (1 + d) i - 0.5 r i - 1 Lifetime Customer Value GC = gross contribution per customer M = (relevant) retention costs per customer per year n = horizon (in years) r = yearly retention rate d = yearly discount rate. EXPERIENCE CREATES VALUE
  60. Brand Value = { (V/S)b - (V/S)g } * Sales (V/S)b = Enterprise Value / Sales ratio of the firm with the benefit of the brand name (V/S)g = Enterprise Value / Sales ratio of the firm with the generic product Let's use as an example branded cereals maker like Kellogg (K) against a generic provider like Ralcorp (RAH). Value of Kellogg brand name = (1.78 - 1.32)(13846) = $6,369 Million Thus, (6369/24200) or 26% of the value of the company is derived from brand equity. EXPERIENCE CREATES VALUE
  61. EXPERIENCE CREATES VALUE “GOOD WILL”
  62. From: The Experience Economy, Pine and Gilmore Commodity Product Service Experience Price/Value EXPERIENCE CREATES VALUE
  63. Commodity Product Service Event/Space Price/Value < EXPERIENCE > EXPERIENCE CREATES VALUE
  64. EXPERIENCE IS STRATEGIC
  65. USABILITY/ LEGIBILITY Nokia 3650
  66. EXPERIENCE BREADTH Product Service Brand Name(s) Channel/Environment (Space) Promotion Price DURATION Initiation Immersion Conclusion Continuation TRIGGERS Sight Sound Smell Taste Touch Concepts Symbols SIGNIFICANCE Meaning Status/Identity Emotion/Lifestyle Price Function INTENSITY Reflex Habit Engagement INTERACTION Passive Active Interactive EXPERIENCE
  67. MEANING CORE MEANINGS VALUES/IDENTITY EMOTIONS PRICE FEATURES (PERF.)
  68. Corporate Meaning Priorities Team Meaning Priorities Customer Meaning Priorities Competitors’ Meaning Priorities Strategic Focus
  69. Accomplishment Beauty Creation Community Duty Enlightenment Freedom Harmony Justice Oneness Redemption Security Truth Validation Wonder 15 CORE MEANINGS: Definitions: makingmeaning.org
  70. TAKEAWAYS
  71. TAKEAWAYS • Qualitative AND Quantitative • Strategy is derived from design research • Design can (and should) play a role • Designers need to leave the comfort of the studio (and learn more about business) • Leadership is communicating vision • Relationships and value are built through experience
  72. QUESTIONS
  73. THANK YOU nathan@nathan.com designmba.org

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