May 27, 2012

Airtel's advertising in Africa

Spotted this Airtel poster in Kilifi, on the Coast of Kenya. Knowing that all of their advertising is done in Mumbai, India's Madison Avenue, I'm curious about the amount of photoshopping this image must have required for the East African market.

May 26, 2012

Why South Africa should not be the entry point to reach Africa's emerging consumer markets

This post is about something I've been musing upon for some months now, ever since my 2011 project which took me around rural and small town Kenya visiting with a variety of cyber cafes. Since then, many other well respected Kenyan professionals that I've spoken with, either in person or online, have confirmed my suspicions that my conjectures are valid.

South Africa is not the best place from which to enter the emerging consumer markets of Sub Saharan Africa.

This was the strategy touted for Wal-Mart when they bought into their foothold earlier last year. That once the "African consumer experience" was gained in South Africa, they could leverage that knowledge to expand northwards to other major urban metros. I beg to disagree, most strenuously.

While I've yet to gain first hand immersion experience in West Africa, I do have the exposure to both urban and rural markets, particularly lower down the income stream in South Africa as well as in East Africa, via Kenya. That first observation alone triggered the thinking behind this post today - the market days in rural Kenya are considered to be little different from those in rural Tanzania or Uganda, and market towns dotting the landscape are familiar to travelers across the region.

This does not exist in South Africa. There are no organic societies in rural South Africa, where farmers and pastoralists have lived their way of life for eons, nor do people point out their grandfather's banana trees or his third wife's kitchen on the sprawling family homestead.

South Africa, particularly rural South Africa, is an artificial construct. Homelands were created some 60 or 70 odd years ago and not simply the kind of land clearing that was done in the Settler Country of East Africa either but deliberately carving out the least fertile land with the scarcest amount of natural resources. A simple drive through the Eastern Cape will show you odd clusters of homes with no natural resources nearby to give rise to any reason for their existence unlike the naturally emerging population clusters near rivers and farmland as can be seen elsewhere. Few in rural South Africa can claim with the pride of the Swahili in the north Coast that the coral block home in Lamu has been in the family for over 500 years.

Education is another area where there is a huge difference. Adult black South Africans who were schooled for the most part prior to the fall of apartheid have experienced only the truncated 'bantu education' crafted specifically for them, unlike the Kenyans for example, who have always had access to the same curriculum and programs as any other resident of their country. While there are many more such differences, society and education are the two most critical.

This matters. A lot.

This difference in history and reason for being influences so many consumer choices, buyer behaviour and mindset of the people that if a company bases their Sub Saharan market entry strategy on their South African experience, there is a danger that they will be taken by surprise when they expand to other regional markets.

Here are some snippets as food for thought extracted from recent news articles:
Historically South Africa was designed as an appendage of Europe , with Africans as cogs in the wheel. The other Africa was sold to local blacks as inferior and the countries best avoided. It is still not unusual to hear black South Africans refer to other African countries as "Up there"". Xenophobia has become synonymous to South Africa. But things are gradually changing as other Africans become better known with time and as other African countries join the success list, politically and economically.

South Africa, well steeped in racial history had always sought to identify with the first world, while the first world itself have re-discovered Africa's massive potential. That outlook has seen the Zuma administration join the economic grouping Brics and the G20 to the neglect of a strong African economic union.

Black South Africa woke up belatedly to discover that the flights from Johannesburg flying North to the rest of africa was filled with white South africans freed from the shackles of apartheid , busy taking adavantage of massive opportunities that had opened up in a growing Africa. MTN South Africa, has made a fortune in Nigeria. Its shareholders are largely white.There are more than eighty South African companies registered in Ghana.
And more to the point, this comment "South African companies find it hard to rule Kenyan market" in an African forum puts the challenges forth a little more bluntly while another recent article clearly states:
Dapo Okubadejo, who is a partner and the head of financial advisory services at KPMG, said: "There is a huge problem with SA companies; they come with a huge big brother attitude. In Africa people see them as being not flexible and this creates a lot of sensitivity," Okubadejo said. He added that it was a mentality that affected investments.

Okubadejo cited Telkom's failure to establish itself in Nigeria as an example.
I am making this point clearly now because it is a matter of concern, particularly when there are enough barriers to understanding the emerging African market opportunity that exist for global multinationals as it is.

South Africa is an offical BRICS now and certainly considered the most sophisticated economy on the continent, but it is no longer the largest as Nigeria rapidly snaps at its heels nor representative of the consumer culture that may be prevalent across the rest of the region.

Lost in transliteration

A couple of things caught my eye on this highway sign in New Delhi last week - toll roads are increasingly common, I hadn't ever seen one in the city before (but then again I haven't lived here since the late 1990s.)

And the prepaid "Gold" and "Silver" levels have been transliterated in Devanagari i.e. the Hindi text above Gold says gold spelt out in Hindi rather than sona, the translation or chandi for silver. How odd!

May 24, 2012

Design for the next billion 2012: What's missing?

An upcoming project's requirements led to the realization that there is a huge gap in design for the next billion (and more). The subsequent domino effect has left a lack in tools, methods, frameworks and thus, disciplines themselves, from the perspective of addressing the challenge of serving the bottom of the pyramid (BoP) population segment. Here I will simply attempt to capture the questions raised in these four areas I've noticed:

1. Tools for the BoP Market

It all started yesterday when I was looking for a means to manage customer relationships with lower income customers in rural Kenya. Where were the CRM tools that could be effectively, affordably and easily used by a social enterprise or business whose primary target audience were the BoP? Examples of Customer Relationship Management apps proffered to me in response to this question in Twitter led to a series of design constraints coming to light as I attempted to explain why such and such or that and the other would not do for the operating environment in which it must work. It made me realize how few tools (if any at all) existed for the BoP market, that companies could utilize in order to build relationships and loyalty with their customers and offer them a well design user experience.

Why was there this gap when there was a plethora of such tools and applications for even the smallest startup to use in the developed world? Furthermore, given the years of investment by a vast variety of firms, large and small, attempting to improve the quality of life for the BoP yet still only partially succeeding in reaching out to these new customers and creating markets and demand, wouldn't there be a crying need for appropriate technology and cutting edge marketing and communication tools to help improve the success rate?

This thought led to the consideration that in order for such relevant and appropriate tools to be created, there needed to be appropriate and relevant methods for design and development in the first place.

2. Design methods for the BoP

So when Victor Lombardi posed a question to me during a recent skype conversation:
How do you visualize the long term experience of the BoP customer?
I realized I hadn't thought about it in quite that way before, and as Victor said, he'd not seen anything on this either. Whereas, these concepts and methods had emerged in response to the way increasingly sophisticated companies were engaging with their customer base. My attempts to grapple with this question uncovered such concepts as Customer Experience (and thus, customer experience design), User Experience and its design, and whole slew of information waiting out there among young and new design disciplines.

While their roots are in technology and the internet, their philosophy can be summed up as a holistic human centered strategy for sustainable customer engagement.

How different is it for those of us seeking to engage with the underserved and overlooked lower income customer base in the developing world? And due to the lack of market development and available information, was it not more critical that each actor focusing on the BoP market consider every single element of their business strategy rigorously in order to establish and maintain their enterprise sustainably? There are no specialized firms nor fragmentation of disciplines for BoP oriented enterprises, they must be the jack of all trades from inventor of new products and services and business models to figuring out how to reach these demanding customers who live in challenging environments.

Yet, all the conversations on "Design for the next billion/other 90%/social impact/poverty alleviation/BoP" revolves around the long established methods and approaches from traditional product design, development and engineering. There is a gap here that must be seriously considered if the tools and apps for reaching these customers, as mentioned in the first point above, are ever to be successfully developed for our use.

3. Frameworks for the BoP Market

And so, we need new frames of reference and ways of grasping the operating environment in order to create strategies and thus action points for this wholly different and new frontier market opportunity. Where is the Customer Experience lifecycle as it applies to a BoP customer, to go back to Victor's original question? And critically, can the existing frameworks and disciplines deal with the challenge of bridging the socio economic and infrastructural chasm as well as the attendant underlying assumptions? Obviously not, since those are the tools and methods and frames of reference which we've all been struggling to apply with little degree of success in the BoP context.

Or, as I said to Victor in response to his question, how can we assume that the long term experience of the BoP customer will follow the same path as that diagrammed or framed for the ToP customers?

After all, when the fundamental mission of a social enterprise is to alleviate poverty or improve quality of life, then the ideal long term outcome for a BoP customer is that he or she moves up and out of the equation. That is, the idea is not that they come back for the "BoP" focused product or service meant for the economically challenged but that their life has improved to the extent that their upward mobility implies more expensive product or a different value proposition all together.

This is diametrically opposite the fundamental assumption in conventional frameworks where the goal is to create customer loyalty and long term engagement. On the other hand, one could create great user experiences and loyalty that leads to word of mouth referrals and advocacy even as the successful customer upgrades to the next level.

4. Design disciplines oriented for BoP customer context and needs

This is an open ended question. Is it enough that the existing fields of design, particularly the nascent and emerging ones - like UX strategy for example - simply be focused on the challenges and constraints of the BoP customers environment, infrastructure and cash flow, or, is it that there is a space for an entirely new design discipline that holistically covers all elements of the user experience - whether a product like a cookstove or a user interface for a mobile app or service - and takes all these fundamental differences between the BoP customer and the first world one into account?

For the tools, the methods and frameworks themselves might need to be redesigned in order to be successfully applied for this customer base. From Brandon Schauer's writing:

UX managers are in a rare position where they can see both the business needs and user needs, and can find where they align to produce revenues from positive relationships, not from goading, entrapment, or annoyances.
Perhaps what is required is a new way to frame the problem solving approach, say for example, UX for the BoP and not simply use the term design as it is currently meant in the narrowest sense.

May 18, 2012

Aspiring changes; inspiring futures

I've been in New Delhi this past week for some work and its been interesting to see the shift in thinking and aspirations. The first few visits in the early 2000s showed the dramatic surface changes of a noisy market opening up to the rest of the world. Today it struck me that many of those obvious things were simply cosmetic - more billboards, more shops and more traffic, a larger variety of consumer goods - all the things that had never been seen before in pre-liberalization India where swadeshi was all important.

If asked to describe what I've sensed this week as my overall impression I would say its the subtler, deeper indicators of the increase and importance of aspirational decision making. A humble example from the home would be all the complaints of there is no more household help to be had, not even migrant workers from the impoverished parts of the nation like previously. They don't want to move to the city anymore now that there are schemes which offer them monthly grants from the government and employment opportunities are increasing right near their homes.

Unpacking that last shift, the seeming and perceived reluctance of rural residents to move to urban metros seeking employment, is a project in its own right, but even so, its implications are significant, imho, even if still in the form of weak signals.

I went out deep into the greater National Capital Region for a meeting yesterday at an office complex and while I couldn't pinpoint each and everything I observed without stopping for a deep analysis, my first impressions left me with a sense that the benefits of employment, education, communication... heck, call it modernization... were now available much much further down the socio-economic strata than ever before.

Has India magically become Singapore? No, and I don't think that is even something that is viable given the scope and scale and magnitude of the change. But in a very Indian way, even with all the problems, my country has managed to make a toehold on the first world rung of the ladder in the past two decades and emerged from its cocooned pigeonholes.

I look forward with anticipation to any opportunity to take pulse of the rural market towns and regional centers to see what the India under the radar thinks. I think the key word will still be aspiration but more critical will be how its interpreted and understood in context.

May 10, 2012

Fool's gold and cornflakes

@syamant pointed me to an interesting article on HBR yesterday "Are you targeting a phantom market?" which was at once amusing and yet quite sad in the spectacle that Kellogg's Cornflakes has made of itself in India. 
How is it possible that Kellogg could envision building a $3 billion business in India, invest $65 million in the first year alone, and end up, 16 years later, with only $70 million in annual revenues? 
From early 1994 to 1996, I had the good fortune to be directly exposed to the first gold rush of multinationals entering India's emerging market opportunity after liberalization. When the second round of global notice began in the mid noughties, I reminisced on this rush and on Kellogg's continued errors. In the comments, Chris Gee said back then (January 2006):
To some degree I think we can see the arrogance of these multi-nationals. Almost a mindset that “everyone wants to be like the West anyway. If we offer them the same things WE like, they’ll learn to like it too”.
I remember in college I had a classmate from Portugal. He told us of McDonald’s rapid expansion into Europe during the 80′s and mentioned that the expansion had stalled in Portugal. While this was shocking to McDonald’s executives, it was not shocking to him.

“Chris” he said to me, “McDonald’s is a fast food restaurant. But in Portugal, we like to eat SLOWLY. We sit for hours, enjoy our meal, have coffee and wine and THEN we go back to work! McDonald’s will not be a huge success.” I don’t know if McDonald’s has re-worked the way they approach dining in Portugal in order to position themselves to be more attractive to Portuguese youth but I thought the sentiment expressed was interesting.

Different countries and different cultures have different needs.
.chris{}
Six years later, they're still quoting Homi Bhabha's finding on cold milk and cereal in the Indian breakfast job and Kellogg's is still flailing around. Why is it so hard to acknowledge the need to observe morning habits in Indian households?



May 9, 2012

Cookstoves matter less than the ladies who must use them

Photo credit: Goverdhan Meena, village Rawal, India Jan 2009
The Wonkblog covers findings from a randomized control trial on the impact of cookstoves in a blogpost titled "What cookstoves tell us about the limits of technology" where they share such insights as:
So what went wrong? Basically, none of the earlier evaluations of the clean cookstoves had taken into account how households in places like India would actually use the things. In early tests, there were trained technicians on hand at all times to inspect and repair the stoves. Not surprisingly, households used the stoves frequently. But when the technicians departed and the owners had to clean the chimneys themselves, they lost interest over time. People were spending too many hours conducting repairs and eventually just preferred to switch back to indoor cooking fires.
 I just need to stop being surprised at how little the people involved in these grand schemes and plans matter. The article goes on to add,
What’s more, laboratory tests had found that the more modern stoves could boil water more quickly using less fuel. This led to the idea that they could help households burn less coal and biomass overall — and so cut greenhouse-gas emissions. But Hanna and her colleagues found that the cleaner stoves did not appear to affect how long the households in Orissa actually spent cooking. “[T]here is no evidence,” they write, “of a reduction in greenhouse gas emissions.”

It’s a dismal finding. But it suggests that for aid projects — as well as for any effort to reduce greenhouse-gas emissions and tackle climate change — having the right technology won’t always be enough. “As engineers and scientists, it is easy to fixate on the technology,” concludes S.C. over at the Economist’s Free Exchange blog. “It is a lot harder, however, to predict human behaviour and how that interacts with technology.”
So I dug deeper to go find this Economist blogpost by the mysterious S.C who, in addition to articulating the above challenges far better, goes on to conclude, far more insightfully, that:
But the belief that countries can leapfrog on economic and social issues solely on the basis of technology seems optimistic. The poor can be frustratingly stubborn to an economist for failing to conform to a rational-agent model. Instead of expecting the poor to "do the right thing", a better approach may be to design devices that fit into their lives with minimal effort. Else, despite good intentions, these programmes won’t affect meaningful change other than the addition of a shiny new toy.
Not to mention that nobody bothered to train people on maintenance, unless that was the point of the randomized control trial - to see if the old "chuck the technology at them and they'll manage" approach still works. I think that only ever worked for the bicycle. But the comments in the Economist blog are fascinating to read, and one stood out:
Improving productivity with more advanced technologies requires change in work routines (habits and customs to process food or learn).
The advice in the final lines doesn't work. Adapting technologies to the existing work routines ("a better approach may be to design devices that fit into their lives with minimal effort") instead of altering them also produces marginal results.
It is the combination of the two: new technologies and changes in work routines, that bring results at a higher level.
The "may be" in the advice can be scrapped. One has not only to learn people how to use them, but how to adapt their daily habits.
 Asking Mrs Meena (in the photograph above) to change her entire day's behaviour (cooking in these contexts takes a lot more time than you imagined) that too, using a cookstove that she made herself, as part of a harvest festival along with the other village women, is asking a bit much from her if there is little or no value or understanding about these barriers to adoption.

Scientific methods and metrics are all well and good to tell you that X does not mark this spot, but its only through a willingness to actually imagine that Mrs Meena might have something to teach you, that one will be able to come up with a solution that she might actually aspire towards wanting to own and use.

May 7, 2012

Putting some real numbers to the world changing on the mobile

VentureBeat writes last week on How tech companies are waking up to global responsibilities, opportunities and shares this oft quoted example of world changing,
As investment in social enterprise becomes more common, major brands and venture capitalists alike are learning how to make a difference without sacrificing their profit-driven missions.
Nokia is a prime example. With 51% of the mobile market share in Africa, it’s one of the continent’s most recognizable brands. Lacking televisions, computers — and, in some cases, electricity — many people throughout Africa access information and communicate solely through their mobile phones. Nokia has not squandered this opportunity - it’s using it to extend affordable, life-changing services and tools to African farmers.

Through its Ovi application store, Nokia offers Ovi Life Tools, an SMS-based app available on extremely cost-effective handsets that provides farmers with timely weather and agricultural information to optimize preparedness and crop yields. Nokia partners with organizations like the Kenya Meteorological Department, agriculture NGOs, and more to serve up tips, techniques and market stats that could help them prevent food shortages and get the best prices for their goods. Life Tools is also being used to deliver lesson plans to teachers, learning games to kids and accounting services for small businesses.
Now that I've been taking a deeper look at what companies are actually able to do, among these population segments and exactly how successful they've been, I have a very large dinosaur bone to pick with this article (and its accuracy).

Lets go back to last month and what Nokia CEO Stephen Elop said in his Q1 2012 Interim Report so that we can be sure of getting our information straight from the burning platform.
Nokia announced an evolution of Nokia Life Tools, now known as Nokia Life, which provides life-enhancing information across the range of Nokia Series 30 and Series 40 products. Since its 2009 launch in India, the SMS-based service has expanded to China, Indonesia and Nigeria. To date, more than 50 million people have experienced its benefits.
Lets unpack this information first before we look at what poor VentureBeat had to write as a message from their sponsors. First, a quick search online brings up 2010 population data from the World Bank for India, Indonesia and Nigeria (we can double it to add China) - we're talking roughly 1.2 billion for India, 240 million for Indonesia and 160 million for Nigeria or a total of approximately 1.6 or 7 billion people.

50 million "experienced" its benefits (did they pay for the service which is/was supposed to be have a revenue generating business model or is this experience a weaselly choice of words?) - Google calculator tells me that 50 million/ 1.5 billion is  0.03333 or 3% of the population targeted with the service. In the 3 years since its launch, even with the dropping market share, that is an insignificant amount of people to reach given the percentage of the population of each of these countries who live in rural areas, are farmers and are Nokia owners. Taking a low ball market share of 30% of the rural population having Nokia phones and rural/urban divide which is approx 60% of the total still comes to 300 or 400 million people BEFORE we add China. Adding China, we now reach somewhere between 8 to 10% of the population benefiting from the experience. Is it worth the effort and the investment?

Now we go back to VentureBeat - what value does the Kenyan Meteorological Department offer populations in India, Nigeria, Indonesia or China? A little more digging reveals the February press release on Asha from which the Q1 Interim Report has lifted its paragraph directly:
Nokia Life benefits 50 million users
Nokia also announced an evolution of Nokia Life Tools, Nokia Life, which provides life-enhancing information across the range of Nokia Series 30 and Series 40 products. Now with additional relevant services, social elements and fresher look, it's available first on the Nokia Asha 202 and 203 phones. Since its 2009 launch in India, the SMS-based service has expanded to China, Indonesia and Nigeria. To date, more than 50 million people have experienced its benefits. 

Nokia Life delivers content in the areas of parenting, life skills, education, health, entertainment and agriculture. For example, Nokia Life can help parents focus on children's physical, emotional and social growth needs, from birth to adolescence. People can also learn English using basic SMS communications, and enjoy ringtones, sport news and trivia.

"Nokia Life services provide an entry to the world of digital content and an internet-like experience for many people who don't yet have access to data plans" said Dieter May, Nokia's senior vice president of Mobile Phone Services.
Really? Come now VentureBeat, if you really had a clue about what African farmers were doing online with their mobile phones, you'd think twice about writing this bullshit passed on to you directly from the PR department of Nokia. Since its inception, Life Tools or Life has been nothing less than a PR driven storm in the teacup, with nary a signboard or radio advert or even a mention among the actual populations where its supposed to be making this difference. Each year, I hear about it, the very same phrases with minor upgrades for modernity are used to describe it and the folks in service development in Espoo and Otaniemi parrot their own press releases as proven fact. In fact, I'd reviewed it in September 2009 from India, on a now defunct blog/URL where the response from those claiming to be on the development team left a lot to be desired. However, here's a snapshot from that experience (here's the entire folder of photographs):


With all due respect to all the best intentions in the world, until these services are assessed and evaluated as any other profit generating business model, they will end up in the list of "BoP" examples trotted out in each conference, presentation and article on blind faith alone.

Someone prove me wrong about this example please. Show me the download numbers, the SMS quantity sent or an answer to this question languishing on the webz.

Cracking the code for sustainable "BoP" business models

Unlearn the past to create the future ~ C K Prahalad
In the half decade or more since I increasingly began to focus on the challenge of the emerging consumer opportunities among the lower income demographic of the developing world, I've yet to hear of an unconditionally successful business model specifically designed for this segment of the world's population.

We've seen the unprecedented success of mobile phone adoption with double digit growth rates in Sub Sahara and rural India or China, but was the prepaid business model designed with the needs of the informal economy in mind or an accidental superstar? The same goes for the oft quoted MPesa mobile money transfer system in Kenya or the virtuous qualities of the Nokia 1100.

The concept of the Bottom of the Pyramid, now called the BoP, has overshadowed the rest of CK Prahalad's contributions to management and strategy - the core competence of organizations is one great example. Today, I'd like to remind us of a speech he made in Hyderabad's International School of Business way back in early 2009.

Overthrow the tyranny of dominant logic, he said, if you want to be successful in today's global economy.
Dominant logic is the result of a pattern of socialisation. All of us are susceptible to it. Often, the dominant logic is implicit. For over fifty years, developed country managers, consultants and academic researchers have been socialised to believe that developing markets cannot be a source of innovation. The academic community has, by and large, accepted this notion as well. The dominant logic provides the theoretical lens with which we see the world. I think it's time to challenge this received wisdom.
And so, I've been thinking of overturning the dominant logic of current day interpretation of Dr Prahalad's Bottom of the Pyramid concept. Lets start with the basic assumption:

This is the best known visual of the pyramid that we have all seen. And its fundamental premise is based entirely on annual income - that is, the so called Bottom or Base of the Pyramid is the vast swathe of this planet's population defined solely by their cash flow. The Next Billion or 4 Billion or the "Other 90%" have neither been segmented with the consideration that global marketers give to the rest of their customer segmentation in 'ToP' markets nor their unique characteristics explored or explained in any further detail. I have been working on the latter aspect and will be sharing those thoughts soon but in this post I want to overturn the dominant logic of measurable income as a quality that could conceivably be applied to people who for the most part earn their living in the informal economy (Neuwirth's Systeme D) and their cash flows are irregular or unpredictable. How can one estimate one's income (if asked) when there is seasonality in cash flow over the course of the natural year?

The concurrent and as damaging assumption that goes hand in hand with this framing is that of 'survival markets' and thus the aspect that these are the poor (all 4 billion of them), a label that is loaded with so many assumptions regarding behaviour and needs. It is this poverty that needs alleviation that has resulted in attempts to focus on people's "needs" rather than the very human and aspirational "wants" of the audience. I've been pondering whether its due to this framing that the majority of business models are still failing to succeed at any discernible level beyond the initial pilot?

What if we turned this whole dominant logic on its head? What if we stopped focusing on people's needs and instead looked at their wants... I don't mean to stop offering them a cleaner cookstove or better solar light and sell them alcohol and tobacco instead ... I mean what if, even though the need might be that of modern energy but the human want is entertainment? That is, what people are seeking is a way to listen to the radio or watch TV rather than a solar powered lantern that doesn't smell or smoke like kerosene?

You'd still be selling them the same thing, just approaching the whole marketing strategy from an entirely different way from what is being done right now for BoP audiences.  Like customers (like human beings) everywhere, they are no different in seeking aspirational goals or status yet we focus on talking about toilets and firewood and kerosene... Is it any wonder nobody wants to listen?

By first questioning, then validating through field testing, the original assumption/s on which "the BoP" market concept rests, perhaps we can start designing business models from scratch that are resonant with the target audience and their particularities with respect to their cash flow, spending habits and environment, than simply focusing on a random number as "income" alone.

May 1, 2012

Out of touch, out of sync: The future of American Design

Since I'm still in the mood to look back at the progress of the design industry in this past decade, let me bring up another article I'd spotted in FastCo as well. This one is from September 2011, titled "American Firms Now Embrace Design, But They’re Aging Fast. What’s Next?" written by FrogDesign's Robert Fabricant. Going by titles alone, I hope this isn't the renaissance of the design industry's intense navel gazing of the 2005-2007 era, although, I've heard it said that design writing tends to consist of little else. Lets look at what he has to say:
This wave of "agile innovation" poses a new set of challenges for designers, as many of the tools of design are already in the hands of entrepreneurs and engineers. Designers can’t wait to be "hired" to enhance or improve these offerings. We must be active participants at their inception. If designers are truly skilled at identifying unmet human needs and creating the breakthrough products to address those needs, then, increasingly we will need to prove our value as entrepreneurs. American designers can and should lead the way in showing how you adapt the design process to rapid, real-time product development. And lead the way in demonstrating what can be achieved by designers as entrepreneurs in our own right. Ten years from now I hope to see designers able to attract VC capital at the same rate as MBAs and software engineers. That is the next big mission for American Design.
Amazingly, just a few months later, we have this Reuter's piece In Silicon Valley, designers emerge as rock stars (though its publish date is Friday the 13th of April, not the 1st).
Five years ago, Justin Edmund arrived at Carnegie Mellon University, a floppy-haired freshman, with artistic talent and dreams of joining a venerable design firm like IDEO or Frog. But during his sophomore year, a recruiting pitch from a Facebook employee turned his head, and prompted a detour of his ambitions.

"It didn't even occur to me that working at a tech company was something I could do," Edmund said. "I switched my trajectory completely."
[...]
Edmund isn't alone. Inspired by the legacy of Steve Jobs and lured by the promise of the current tech boom, young designers are flocking to Silicon Valley, where they're shaking up a scene long dominated by engineers and programmers.
[...]
Last year, McClure put down money to create the Designer Fund, a program that identifies entrepreneurs with strong design backgrounds and offers seed money and mentoring from experienced founders like Putorti and Chad Hurley, of Youtube. The fund, headed by Enrique Allen, a 25-year old graduate of Stanford's design school, has partnered with more established venture investment firms like Khosla Ventures, Andreessen Horowitz and Kleiner Perkins.

"We're reshaping a lot of how you build a company," McClure said. But, he added, "there's still a resource and talent shortage" for interaction designers.
Young American designers seem to be already leading the way, as the rest of the article clearly demonstrates, attracting VC interest and a fund developed specifically for them. Can this shift have suddenly happened in the 6 short months since that article was published at Fastco?  Apparently not. Dave McClure writes in BusinessWeek back in February 2010 on "The Value of Design to Startups" where he says:
It certainly doesn't hurt to have code jedis at the helm of your starship, but engineering for consumer Internet startups need only be competent. The real challenge is finding designers and product managers who can build an awesome product experience, and marketers who can figure out effective, scalable, integrated distribution strategies (whether organic or paid, whether technical or creative).
So are these two clusters of highly intelligent people simply talking past each other, or has the design industry indeed aged and faded to the extent that they're unaware of what's happening in the cloud around them?

From the perspective of someone who was once actively thinking and writing about design, from a desk on a hill in San Francisco, just five years ago (when Justin Edmond arrived at CMU in fact) it seems that American design has a bigger problem they face today - that of still living in an echo chamber whilst gazing at their navels.  Man, even I've archived those posts on a dusty Wordpressed shelf and moved on to the next frontier. Once upon a time, Fast Company was as edgy as Wired in the heydays of "make it look like Wired" but today, it seems to have become the "business strategy" thinking designer's bulletin board. 

Going nowhere fast: Looking back at a decade of design thinking

"He who doesn’t know where he came from doesn’t know where he is going” ~ African proverb
Today, I came across an article in FastCo written by one of Monitor/Doblin's people, Melissa Quinn, whose bio seems to imply she is responsible for selecting the right mix of professionals from both business and design. Reading What Both MBAs And MFAs Get Wrong About Solving Business Problems took me back in time to a wholly different era, just about 7 years ago to the Spring of 2005, when "Business" and "Design" first began to intersect on a graph that had until then been asymptotic. That I feel grandfathered is a side effect, but that the conversation has gone nowhere in these intervening years is a much worse feeling for one who has been immersed in this conversation for a decade. And, I was a latecomer as those articles reveal.

Why did Quinn's article wake up the ghost so suddenly? She wrote:
 And I was less than impressed with the business-thinking skills of designers the following Monday morning, when I interviewed 10 of them at the Institute of Design in Chicago for jobs at Doblin. To most candidates, I asked of the ideas they presented in their portfolios, “But how does it make money? Who will pay for that? How much would you need to sell to be profitable?” and was met with far too many blank expressions when I did so. Design schools have a long way to go to integrate good business thinking into their programs. In order to make their value known to the world, designers need to speak the language of business--that’s where great ideas get funded and developed. Design education needs as much of an overhaul as business education if we are to benefit from the talents of design thinkers in the business world.

I hope that we see meaningful reinvention of both design and business education so that the business world can realize the true value of design thinking. Until that happens, Rotman’s Business Design Club would be wise to require challenge teams to comprise both designers and MBAs. At least it would level the playing field, and it may improve the educational experience for both--assuming each can decipher what the other is saying.
"Ahh, my poor students" was my first thought, forgetting that I'd not been Director of Graduate Admissions and head of the department for all things students since the summer of 2005. Ironically, most of Doblin's current team are either former classmates or former admits, can you blame them for raising the bar too high for new recruits? Still, pride in the past aside, one must now ask what the problem is with the curriculum and the teaching at the Institute of Design if after 7 years they still haven't learnt to think about the bottomline?

After all, hadn't I taken Design Planning with Doblin's Keeley himself? His curriculum began (in the Fall 2003) with an introduction to most of Porter's classic frameworks of strategy and competitive analysis interspersed with the usual suspects from Bschool textbooks. If anything, that should be the program (Human Centered Design Planning) that should have incorporated the need to think about business models from the revenue generation point of view. The joint MBA/MDes came much later - in fact, Brad Nemer  was the very first student to attempt both these degrees together  in 2002 and that too, both were extremely intensive fulltime programs. It had taken a lot of kicking and screaming internally, if I recall those faculty meetings correctly, to finally create the merger of the two degrees into something a human student could conceivably achieve within the 2 year span.

I know that even back then, many students were planning on taking the basics of finance and accounting but today, in the Spring of 2012, I am surprised to read that business model design with the attendant consideration of revenue models and payment plans are still giving the design students a "blank expression".  The irony of Melissa Quinn's complaint in FastCo is not lost on me when you consider that the original Institute of Design - Moholy-Nagy's new Bauhaus - was reinvented by Jay Doblin himself. (Read that linked PDF, its Doblin's "A short, grandiose theory of design" that first puts forth the need for design to think about business and its goals) and that Keeley is on the Board of Trustees.

I'd like to end this pondering path down memory lane with Brad's quote in the 2004 Core77 article:
"I chose the dual-degree path for two reasons. After working in several high-tech startups, where the product essentially is the company, it became clear that no matter how grand the vision, design is managed in the context of business." He said as he explained his choice of degrees, "So it is critical to understand the basic forces of accounting, marketing, and organizational management, because otherwise even the best designs in the world will go nowhere. The much-celebrated divide between "designers" and "suits" is not only counter-productive to success all around, it's inaccurate. Once you demystify business fundamentals, they become just like any other design constraint, and are no more insurmountable."
and leave it to the powers that be at ID-IIT, Chicago to ask themselves what progress they've made in this century.

An update: Victor Lombardi tweets (In) Sum: Have we thrown out collaboration? Until we learn to make unicorns, it's the *team* that needs all those skills

For some context, I'd interviewed him for that very first article as well, back in December of 2004 where he'd said:
"My partners and I view design as a way of thinking which is applicable far beyond the design of products" he explained. "Our clients want to explore innovative business strategies, ways of collaborating, and ultimately to develop their own innovation capabilities." So while Lombardi's firm thinks like designers, they work with executives to help them explore the options a more creative approach can offer. "It's not easy for people to stretch their thinking to encompass both business- and customer-centric points of view, but ultimately this is what we need to do to create innovative, human-centered organizations."