October 30, 2012

Rigor in brainstorming as a pause in the process of creating the new

Conventional wisdom states that the best brainstorming sessions are the extremely rapid fire ones where ideas are flying out like arrows and much energy is expended. In actual fact, you need a little bit of deliberation before you can make a concept tangible. And a little more before you invest in fixed costs before getting it to market.

Where and how does this apply?

Since brainstorming is a part of the user centered design process, it really should not be left out of the strategic planning process. In actual fact, it very often is – when timelines are created by earnest young project managers, trained in the latest business school frameworks, they follow the planning phases taught in classes like Marketing 101 or Intro to strategy.

None of these processes, from what I recall of my business school days have an explicit step in their various processes for brainstorming or ideation. It is implicit, that if a marketing department of a large global multinational, goes away on a fancy offsite to come up with the next three year markeitng plan for the country, they will get together in teams and brainstorm on strategies for the plan.

But they don’t, not really, it’s a few hurried minutes, usually with some amount of guilt or embarressment in indulging themselves in the pleasure of free flowing thoughts and ideas instead of doing ‘real work’.

That’s something every designers knows, on a deep and fundamental level, that you need to set the time aside to brainstorm, that the energy is the key to a good end result, not necessarily the specific ideas in and of themselves.

It seems like a very organic process, and it brings the whole team together, prepared then to go their own ways for their specific parts of the project, after all having more or less understood the collective vision.

If conducted with the rigor that it is among particularly strategic human centered design firms among regular finance, sales, marketing or engineering meetings, in a company, before it begins the new product development process or new market strategy, think of the difference it would make to the global end result?

 There is a fundamental difference between a ‘launch’ or a kickoff where the senior management presents to the team the concept and it’s implementation (i.e. the corporate strategy or vision) and one where the team is creating the brand together.

And this "paused brainstorming" can be applied by any group of stakeholders getting together to implement a large scale project or programme with common goals and outcomes.

October 29, 2012

Pondering media trends in "Bottom of the Pyramid"

I'm seeing an interesting trend in the news about "Bottom of the Pyramid" markets. Even as we noticed yesterday, that the absolute numbers of those living on $2/day were on a downward trend, there's hints that the informal economy has arrived in the OECD nations (or erstwhile First World, I suppose).

Grupo Electra's Ricardo Salinas, in BusinessWeek:
“What we would like to do is have the same model we have in all our other eight countries, a bank especially for people at the bottom of the pyramid,” Salinas said today in an interview in Washington. “It’s a question of regulation, a question of convincing the right authorities that this is something that’s needed. We’re working on it.”
“The bottom of the pyramid exists, even in the U.S.,” he said today after a speech at the U.S. Chamber of Commerce. “It’s amazing the number of families that have been excluded from the traditional financial system in the States. And with this economic crisis even more families are in that situation.” 

That would be an untapped market and whole new business opportunity for retail banking but even more interesting is the news from Unilever a couple of months ago:
Anglo-Dutch food to detergents group Unilever expects poverty to return to Europe and is adapting its strategy accordingly, European chief Jan Zijderveld told the Financial Times Deutschland on Monday. Unilever is introducing smaller packaging for its cleaning, detergent and hygiene products which sell at a lower price than in the usual larger packets and containers.

'If a Spanish shopper has €17 for the shopping, I cannot sell him a detergent that costs half his budget,' Zijderveld told the paper.

The new strategy is based on one Unilever has been successfully using in Asia where, for instance, they sell individual amounts of shampoo for one wash at 2 or 3 cents. 'We still make money, but we've forgotten how to do this in Europe,' said Zijderveld.

Global markets for sachets. This explains the availability of my 3-in-1 Nescafe sachet in packs of 10 in The Netherlands and in single units in Estonia. Yeah, I can afford 17 eurocents for a cup of coffee. Visiting Tallinn and Barcelona all the while thinking about the prepaid economy and kadogo pay as you go affordability was truly fascinating. I honestly cannot say what the economic impact of Spain's problems has been in the streets and hustling life I saw in old Barcelona. What an affordable holiday location, though the weather is better than the even cheaper Tallinn.

The Scandinavian lifestyle and social support network is an extreme that the middle income economies cannot consider, not as long as the positive value of having some informality in the bazaar means that there are still opportunities for growing a sustainable enterprise from scratch. As a newly admitted MBA student from ESCADE said to us at dinner,
"This is Spain, we still think of good food, though the economy is hurting."
Who was it who told me that growth alone wasn't enough of a goal for an economic ecosystem that spans the globe? It seems to be the consensus of most of the people I've been meeting across Europe these past few weeks.

October 28, 2012

Putting numbers to the story of the emerging global middle classes

The top 1% of the global income distribution has seen its real income (adjusted for inflation) rise by more than 60% over those two decades.

What is far less known is that an even greater increase in incomes was realized by those parts of the global income distribution that now lie around the median. They achieved an 80% real increase in incomes.

It is there — between the 50th and 60th percentile of global income distribution, which in 2008 included people with annual after-tax per capita incomes between 1,200 and 1,800 international dollars — that we find some 200 million Chinese and 90 million Indians, as well as about 30 million each in Indonesia, Brazil, Egypt and Mexico. These 400 million people are among the biggest gainers in the global income distribution.

The real surprise is that those in the bottom third of the global income distribution have also made significant gains, with real incomes rising between more than 40% and almost 70%. (The only exception is the poorest 5% of the population, whose real incomes have remained about the same.)

It is precisely this income increase in the bottom of the global pyramid that has allowed the proportion of what the World Bank calls the absolute poor (people whose per capita income is less than 1.25 PPP dollars per day) to decrease from 44% to 23% over approximately the same 20 years. ~ Branko Milanovic 2012
How does your "BoP" market strategy change given the very real changes in income generation thus opportunities and aspirations? Will they really be willing to "make do" with small solar lantern if they can strive to electrify their house, at least with solar power?

You can say that only a percentage have emerged above the poverty line, and with seasonal variations in their cash flow, who knows what income means, but one thing is clear and that is enough people have been visibily upwardly mobile to offer a taste of it to everyone around them. The mindset is changing, but how will the crafting of consumer culture help challenges of scarce resources and irregular cash flow of unpredictable amounts? 

October 21, 2012

Barcelona and informality

The ancient Roman town of Barsino, or Barcelona, the Catalan capital in Spain, was the location for the recently concluded symposium on the Informal Economy. Short overview of the conference is here on The Prepaid Economy blog, while on Flickr you'll find my overdose on Antoni Gaudi as well as just the myriads of eyecatching details of the city.

I've been in Estonia this past week holding a human centered design workshop at the Tallinn University of Technology but those photos and writeup on the experience here will have to wait for another day or so after I'm back in The Netherlands. Today is a travel day.

October 9, 2012

The Africans are not beneficiaries anymore

Innovating without knowing your customer is like being lost in the dark with your eyes closed: you'll never know if you hit the light switch ~ @bdoorn

My colleague on my current project in The Netherlands, Bart Doorneweert, tweeted that insight after our next to last user interview today (tomorrow is our last). While I've been hesitating to say out loud that there is a crying need for user centeredness in program and policy development (design, even), its even more obvious when our client's perception of the users has not changed since aid meant charity for beneficiaries and not economic and market development of the BoP customers.

That is actually the biggest difference between the Indian and Chinese business interactions across the African continent, including everyone's former colonies, and the erstwhile European Union. Its hard to do business when your broker is a notforprofit NGO whose mandate is not to make a profit. Sustainability in agriculture, for example, does not mean the cost of going green is so high against the pittance paid by the megamultinationals for cocoa that farmers are giving up the business as a lost cause.

Maximizing resource extraction while minimizing input does not take the human condition into account. The so called Bottom or Base of that economic pyramid prefer that we Maximize our constraints and minimize our resources.

They want to do business but the trendy money is chasing "sustainable social enterprises" set up by trust fund designers. Ben Lyon, founder of Kopo Kopo told me in a conversation a few months ago in Nairobi:
We weren't beholden to our customers until we starting thinking like a business.

We didn't hold ourselves accountable until we started treating our 'beneficiaries' as customers.

No investor took us seriously until we dropped the 'social enterprise' label.

 I think that is going to be the biggest shift required in perspective - to think of your beneficiaries as your customers and to consider the design of win win business and revenue generation models. This reminds of when I first realized this kind of big shift difference in positioning users in the designer's mindset. It was back in early 2008. Because I can see the difference in the mobile landscape in Africa, starting with the internet cafe industry project for Village Telco one year ago across Kenya that allowed me to get a rapid yet varied snapshot by end of July 2012 when I ended my second contract with ToughStuff in Nairobi.

The BoP are not really the Bottom of anything nor do they think of themselves like that in Africa. And along with this change came the simultaneous impact of increasingly affordable phones and data access to the world wide web leading to very rapid rate of adoption of everything on the mobile platform. In 4 short years, the size of the African mobile phone user base has come a year or two away from doubling.

Think about that for a moment.

This is not an iPhone in every suburb. This is a world wide communications device bringing the World Service to your ear. All you need for that, really, is 20 bob for a week's charge of electricity. Plugging into Facebook or Twitter will change your thinking of the world.

So, even in the remotest village, some smart kid is already dreaming of hacking his own makerbot or at the very least gawking at the global consumer mainstream floating by, through his little screen.

This, however, does not change the realities of their consumer behaviour. Their irregular incomes from a variety of sources, if part of the cash based informal and/or rural economy, are seasonal and life remains hard, even though the webz are changing dreams and aspirations almost as fast as hotcakes.

When you are talking to a potential customer, you seek to touch his aspirations with your offer, but when you address beneficiaries, you only talk about the social benefits not the human dreams.

October 2, 2012

Tilting at windmills - inevitably renewable

Windmills, Holland October 1st, 2012
Why was it so hard for people to massively change energy infrastructure? There are parts of the world where as little as 10% of the population has access to energy. Innovative solutions and business models can be tested very easily. The latest we hear is MKopa from Kenya, attempting to implement a pay as you go payment plan via the SIM card and MPesa. This is initially available for solar power lighting solutions or home systems, I am not yet clear.

There are suddenly many variations on this theme - MeraGao in Western India, Eight19 also in Kenya, while Nuru offers energy as a service. In the next decade or so, we'll have a better idea of what has emerged in the household energy solutions space. I suspect the existing model is already obsolete. Giant Asian cities like Manila and Singapore have begun pilot testing prepaid electricity which also tracks energy consumption, in the case of the island nation.