Recently, my colleague Robert Richman and I were asked to speak at the DMI Annual Conference in New York. Here we explain how culture is the key to building a design-driven company.

From its 1937 creation of a Frank Lloyd Wright-inspired desk to its 1996 investment in product design juggernaut IDEO, Furniture-company-turned-workspace-consultant Steelcase has a long history of not only investing in new ideas but successfully bringing them to market.

The latest in this long tradition is a newly formed group called Growth Initiatives, anascent project that focuses on creating, testing, and bringing new innovations to market. The group’s objective is to capture and systematically fund potential revenue streams as they look 5 and 10 years into the future. To accomplish this Growth Initiatives uses a rigorous venture capital-style investing process that grants progressively larger amounts of resources as an idea proves its value. This method mitigates Steelcase’s investment risk and ensures that only the most viable ideas move forward.

We asked Growth Initiatives program lead John Malnor how his team pushes the boundaries of what’s possible to help Steelcase achieve long-term design andfinancial success. His first response focused on the definition of failure; before an organization is able to fully embrace the opportunities provided by new ideas, it’s mandatory to change the definition of “failure” from “not successful” to “not learning.” He explained that everyone inside the organization must understand that it is acceptable for an unproven idea to not make it to market; and the only true failure is not learning from the process.

“You might have 20 different ideas, and only a couple of those might be viable for the long term. Instead of saying, ‘That failed because it didn’t get second-tier investment,’ you archive that idea, because maybe its time hasn’t come. Or you capture what you learn from that first idea and then look for somewhere else to apply it.” Or perhaps the idea just needs some tweaking. Malnor makes the point that even the best concepts go through at least two or three iterations before they’re ready for market testing.

One idea alone has little chance of success, so Malnor and his team try to gather several. “You want to be able to pick through a portfolio of ideas. If you have just one…people get invested and can’t let it go because there are no alternatives.” They become blind to objective evaluation.

Where do all the ideas come from? Customers, investors, trends, the market, the competition—everyone. “We’re always working on building our skill capturing new ideas,” says Malnor. He adds that Steelcase also cultivates employee participation in the process: “We make it easy for them to contribute.” The company intranet features a form developed to encourage anyone to jot down an idea.

What to do with an inbox of ideas? Design a decision-making gauntlet to determine which ones make the cut, says Malnor: “We’ve developed a set of frameworks that we filter concepts through.” The frameworks he’s referring to are questions that weed out weak ideas and reinforce the strong. Examples include: Is the idea a viable business opportunity; and Does the new business concept align with the company’s overarching purpose? “Some ideas have great potential,” Malnor explains, “but if it doesn’t build the long-term value of the brand, we pass.”

Perhaps the most critical framework is whether the new idea aligns with Steelcase’s current focus, which is determined by macro trends like economic environments and technology developments. In the past opportunities have ranged from geographic and product category trends to competitors’ new developments.

If an idea successfully answers these questions it’s promoted to prototyping and receives an initial round of funding to explore its real potential.

The first rule of prototyping: How fast can you learn, how little can you put at risk? When a concept is ready for in-market prototyping, “you need to invest the smallest possible amount to prove the concept,” explains Malnor. If you can figure out how to do rapid in-market prototyping for low cost and quick learning, then you’ll already have those metrics in hand to help prove the business case when you start looking for additional resources.

Malnor offers a few key recommendations for companies that want to emulate this type of methodical innovation. “Trust the talent within your company,” he explains. “Understand what your purpose is, and then build the skills and thick skin it takes to rapidly prototype ideas. You have to be willing to stop investing in many of those ideas—most of them, in fact. The only failures come from not trying new things—or, even worse, not learning from each new concept or venture.”

One early success to come out of Growth Initiatives is Workspring Venture (www.workspring.com), a collaborative business space designed to “inspire and support creative process, productive workshops, and transformative exchange.” An inspiring alternative to hotel conference rooms, workspring is intended to better address a growing trend in business—creative off-sites. No longer within the Steelcase primary offering of furniture, Workspring may have seemed risky to some. But it satisfied all the frameworks Mr. Malnor and team subjected it to, and brought it to market.

Co-Authored By John Root Stone and Josh Levine. Author Posting. © 2009 The Design Management Institute. This is the author’s version of the work. It is posted here by permission of the Design Management Institute for personal use, not for redistribution. The definitive version was published in Design Management Review, 21:2, . http://dx.doi.org/.

Untangling brand and customer experience, in 10 minutes or less from Brandon Schauer on Vimeo.

Does the brand define the customer experience, or is the customer experience the brand? Your work may involve both, but you probably attack problems with a bias for one or the other.

Earlier this year I asked Josh Levine of Great Monday to simply describe the relationship between brand and experience, and I like what he said.

I went back and dug deeper with Josh to clear up the differences between how he described it and and the way I often see the relationships between brand and experience being practiced. What emerged was this illustrated question and answer, attempting to untangle brand and customer experience in just 9 minutes.

Of all the years of academic research spent understanding tribal affiliation, inclusion, identity and shared cohesion, it’s only recently that business has taken notice. That’s not to say commerce based tribes haven’t been around forever—they have—but until now they’ve formed organically, without the considered attempts of brand managers to leverage this platform.

THE HUNGRY TRIBE
Author and entrepreneur, Seth Godin has published extensively on the importance of leadership in forming strong tribal communities and brand guru, Marty Neumeier explains it this way: “Selling is pushing products at people, but brands pull people into tribes.”

Traditional marketing and brand managers have finally started to take note, but it appears to be no more than a latent response to a smarter, more educated consumer who is looking for more. Not more advertising…not more spam…not more widgets…and not more clutter. Consumers today are hungry for more meaning.

DON’T SHOOT THE CUSTOMER
Like firing a shotgun into a flock of geese, many marketers still assume that if they interrupt enough people enough times, at least some of them will pay attention. That may work but only until another product comes along that is better, sleeker or less expensive. When that happens (and it will), to regain the high ground you must launch another costly ad campaign. When companies compete on features, functions or price, they might as well just say it: “We don’t care enough to spend the time to understand what you find meaningful.” This near-term mindset is the status quo for organizations that believe indefensible products, inevitable commoditization and low levels of consumer engagement are the only market reality.

However, organizations that create value for the future customer first create a much more formidable barrier to competition. In this instance we’re talking about a considered effort to create platforms and artifacts that connect communities and facilitate the creation of a tribe. The marketing role needs to be fundamentally re-thought, to create a shift away from thinking like traditional brand managers, into a world where marketers become brand advocates and evangelists.
A BUSINESS IS BORN
What started as a small Summer ritual amongst a tight-knit community of artists on a Northern California beach has slowly grown into a full-fledged pop-up community and multi-million dollar festival. Burning Man now attracts nearly 50,000 people ranging from geeked-out yuppies to middle-aged hippies and every future primitive technophile in between. This diverse group of eclectic revelers share a desire to travel to Black Rock City, CA every August to contribute to the creation of a temporary city for radical self-expression and communal bonding.

This once informal bon-fire on the Beach in San Francisco not only built a social platform that brings people together over a common interest, but created a business platform that generates millions of dollars annually. Today Burning Man charges $200 a head and earned over $10 million in 2008 alone. Burning Man didn’t start as a business, but slow and steady cultivation of this Tribe has certainly made it one.

MORE THAN JUST A CAUSE
Yellow Livestrong bracelets can be seen on everybody from neighborhood kids to pro athletes. Even the President of the United States has worn one. What is it about this $1 dollar rubber band that generates brand awareness and unprecedented amounts of money for cancer research and Nike in such a short period of time?

Livestrong bracelets are more than just a receipt for your dollar. These bracelets have become a way for people to identify themselves as part of the club. They are a low stakes way to tell the world “I support Lance Armstrong in his fight against Cancer, because I too am an athlete who understands the importance of staying active.”

Lance, in partnership with NIKE, created a platform using these bracelets as a way of connecting people, with the ultimate goal of raising not only cancer awareness, but also money, and lots of it. Whether for profit or non-profit, to succeed in today’s marketplace, organizations need to create tribes—not for the money (though that’ll come), but for a purpose.

SELLING A LIFESTYLE
From the first Beetle, to the most recent GTI, Volkswagen has successfully built and sold great cars, but more impressive is it’s consistent ability to build tribal lifestyles through behavior. A recent viral video sponsored by VW received almost 4 million hits on YouTube in only one week. The video shows people will change their behavior if a truly fun option is available. (In this instance alost everyone choose not to take the escalator when a group of artists turns a steep flight of stairs into a larger-than-life piano.)

The ad has absolutely nothing to do with cars, yet contributes to their ability to sell more of them by accessing an emotional value held vehemently by the VW tribe: fun can make the world better. Volkswagen sells a lifestyle, and their tribe happily sees it’s value.

CONCLUSION
In a world where consumers own the brand, brand managers need to think more like brand advocates. They must take the initiative and become leaders by creating platforms and artifacts for communities to connect with one another, not just managing wordmarks. People are obsessed with connecting to others over shared interests, values and meaningful experiences— these people will find each other with or without your product or service, why not help?

Challenging times divide winners from losers. Winners survive because they never forget the important enduring truth: High quality products and services are created by engaged employees who know and care about customers.

Are you facing falling customer orders? Slower renewals? Cancellations? Requests for ever-deeper discounts?

Those are silly questions. Of course you are experiencing these recession symptoms. And you have probably cut budgets and jobs more than you like.

So now what? When you can’t (and shouldn’t) cut any further, you can leverage the creativity of the people on your team. This is truly the time when employees are your most important assets — for real, not just in slogans. In a recession, everyone should be in marketing. Motivated employees contribute to creative thinking that can help retain current customers and identify new ones.

Here are five suggestions:

1. Increase customer contact and communication. Financial turbulence sometimes leads managers to over-emphasize pleasing banks or investment analysts while appearing to take customers for granted. But as we all know, without customers, there is no business.

Senior executives, regardless of function, should become personal ambassadors to major customers, thanking them for their business and making it clear that they want to help them succeed. But don’t stop there. People throughout the ranks can reach out to customers – perhaps a personal note or a phone call to provide news or ask questions. Customers will know you care, you will be better informed, staff will feel more involved, and unexpected opportunities might arise.

2. Start looking for new markets now. Companies dependent on a few large customers are particularly vulnerable to changes in their customers’ fortunes, but all companies need the flexibility to move quickly into promising markets. In uncertain times, managers should increase efforts to identify additional uses for company products and additional sources of customers for the future.

Creative thinking can find opportunities to offset losses from current customers. Starting research now on less-familiar industries or parts of the world will help prepare managers to move quickly when conditions improve. This might involve sales calls, tests of a new channel, postings on Web sites targeting new areas or industry segments, sending more people to speak at industry conferences and cultivate relationships – good investments even if they seem like the first candidates for cutting. During slow times, employees who might otherwise be idle could be deployed to gather information by discussions with end users. If travel costs are too high, the telephone can be augmented by Internet research.

3. Invest in employee morale. When employees fear for their jobs, worries about family finances drain energy and increase the temptation to stay home on the slightest excuse. When morale is down, productivity and attention to customers suffer, right at the time that you most need zero defects, efficient teamwork, and cheerful voices handling customer questions. Too many companies treat employees as costs to be cut, when they really should show employees how important they are. Managers can greet employees personally and thank them for their contributions. Small tokens of appreciation and enjoyment, such as a weekend outing with families or a food festival with employee contributions as a break during working hours, go a long way to keep people motivated to perform well.

4. Emphasize and reward small wins. Innovation is an on-going task, but turbulent times increase the need to get everyone involved in undertaking small improvements that can be easily and quickly implemented – to find a cost-saving efficiency, improve the work environment, or convince customers to buy a little more.

People at lower levels and in unexpected places might see how to make a greater difference for the business, but no one has asked them, or they thought the ideas were too small to mention. A program that actively seeks these ideas and rewards them — publicity, appreciation, or even a small portion of the cost-saving or revenue gains — can strengthen the company immediately. Motivation increases, and customers see a company that is always ahead of the curve in terms of new thinking.

5. Stick with your values. There is always a temptation to cut corners when times are tough. Managers should avoid desperate moves that could damage them or the company later – no accounting tricks, no shoddy merchandise, and no compromises with ethics, such as “gifts” to a purchasing agent. Reminders about company values can reinforce solidarity and increase the confidence that customers have in the company.

Challenging times divide winners from losers. Winners survive because they never forget the important enduring truth: High quality products and services are created by engaged employees who know and care about customers.

1) “It’s the same old story – brand shirk the love of consumers in favor of control”

2) “Let’s face it – Mars, the parent company of Snickers, has been struggling to understand the web”

3) “a reaction with responses like the image below or the newly created Snickers fail tag (#Snickersfail). Seriously. Snickers, I thought you were smarter than this?”

I’d say they are struggling to understand the nature of brand, and how brand really works.

An article comment reads: “When it comes to protecting your brand, you can’t pick and choose which “violations” to oppose.”

Brand as algorithm? Can corporate behemoths have a tight team directing brand point-of-view and allowing it to change and evolve appropriately, thereby giving the brand some life & personality, or are they obliged to make brand an algorithm to control their image? How complex would that algorithm need to be to work? Where does personal judgment come into the picture? What does a successful brand really come down to?

• excellence of taste in the fine arts and humanities
• an integrated pattern of human knowledge, belief, and behavior that depends upon the capacity for symbolic thought and social learning
• the set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group.