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Nathan explains what business has to learn from design (tolerance for ambiguity) as well as what design has to learn from business (comfort with data and communication skills). He also touches on redefining the word "value," design thinking, and deliberate design that improves customers' lives.
Skill Level Appropriate for all
- [Voiceover] Nathan Shedroff is a serial entrepreneur, who researches, speaks, and teaches internationally about meaning, strategic innovation, and science fiction interfaces. He is also a pioneer in experience, interaction, and information design. Shedroff is the chair of the MBA and Design Strategy at California College of the Arts in San Francisco, as well as the author of several books, including Experience Design 1.1, Design is the Problem, and Design Strategy and Action.
Shedroff worked with Richard Saul Wurman at the Understanding Business, and later co-founded Vivid Studios, a pioneering company in interactive media, and one of the first web services firms on the planet. - We're here in New Orleans at the AIGA Conference and I have the distinct pleasure of sitting down with Nathan Shedroff. Nathan, thank you so much for being here. - Thanks for having me. - So you're the chair of two Design MBA programs focused on Design Strategy and these are at the California College of the Arts.
This is pretty groundbreaking. What was going on that made you realize that there was a market for this? - Well certainly it was groundbreaking at the time and it still is a little bit although there's been hints of similar kinds of programs popping up globally since then. We started the program because we wanted to do a different kind of business. We're centered in San Francisco, which is one of the major innovation hubs in the world.
Everyone knows San Francisco's always a little bit different anyway, we do business a little bit differently, we have different expectations. Coming from a design background, we have the opportunity to look at chiefly products and services differently, but ultimately business models and business culture differently. So we didn't build this program to create or help people become leading designers, what we really want and why it's an MBA is we want to prepare people so that they can lead change and be the leader of the company but lead in a designerly way, which is to say a creative way and a way that honors the qualitative not just the quantitative in business.
Our goal is a little bit different than let's say a Design Management program which is about managing the design function, we think people whether they have a design background or not need to lead the company or lead the whole organization, but do it in a new way. - So with this program you're essentially melting the worlds of design and business together and these are two worlds that don't always communicate so well together. So how can design and business learn to speak the same language? - Sometimes in the past they've been adversarial, other times in the past they've actually meld really well.
If you go look at what happened in the 60's and 70's what happened with the Iems for instance and their relationships to businesses. There have been times in the past when design and business worked much better together. Since the 70's at least in American business, the quantitative processes have sort of taken over business and it's really become more and more about managing in an optimized way. Not that designers can't optimize things but designers aren't focused on optimization as much as they are with creativity and innovation.
The two need to come together and you're right they do need to speak a similar language. We created this program because we kind of figured that most business people are not gonna have the time or energy or desire to go learn design, and they don't have to. So it really behooves designers to go learn the language of business and to go learn a little bit about business issues and processes et cetera, so that they can speak better with their business peers. That's sort of been the history of my career because I got an MBA sort of by accident and in the process of doing so realized that first of all some of these things aren't as scary as you think they might be like accounting and economics, although finance absolutely is a bear, but I found a place in the business world that I didn't know was there.
That was a place that had a lot of influence and had a lot of enjoyment about taking my skills that are mainly qualitative skills and applying them to balance out the quantitative tools that we've built up over a hundred years in business and found there was a lot of power in the two working together. That really is what drives the curriculum in our program, it drives the kind of experiences we have the students go through, and it drives the goals of where we think leaders need to be, again regardless of their background.
Leaders need to be able to balance these two sides in the future or they're not gonna accomplish what they want to. - When you're doing this, there's gonna be some cross-pollination naturally between the worlds of business and design, so what do you feel business can learn from the world of design? - The biggest thing that business can learn is a tolerance for ambiguity. Business processes don't have a lot of room for ambiguity. They need toward optimization, accuracy, exactness, confidence, but the reality is there's a tremendous amount of ambiguity in business.
There's a lot of myths of business and business people often fail to recognize simple truths about their industry and their place in the world because they've maybe over confidently bought into some myths. For instance, anytime you see the word plan, that's fiction, plan is fictions, no different than a story, like a novel, it may have number attached to it, it may have spreadsheets attached to it, but none of it's happened yet.
And in Silicon Valley especially you see lots of plans and at the end of the pitch there's a line that does this which is about profit, that hasn't happened yet. But when numbers are attached to things in our culture, they take on a new connotation that makes them seem almost assured right? Sure that's gonna happen, there's numbers that say it's gonna happen. But it's all just fiction. You have to work really hard to make that fiction work. A lot of business people especially the more quantitatively minded, they cling to those numbers as the mechanism to make value, to create things that people want.
And when things aren't so clear, and times get ambiguous, that really throws them for a loop. Designers on the other hand, we live in ambiguity. When you are given a blank sheet of paper and asked to make something incredible, you stare at it thinking, "Oh my god, this is the project I'm gonna fall flat "on my face on," but somehow we have a whole bunch of processes and tools that we can make something out of that black sheet of paper and often make something that just astounds other people.
So design, being a more qualitatively focused endeavor, lives in ambiguity and that's what a lot of business people can't handle, they do everything they can to mitigate risk, and get rid of ambiguity, and it's admirable but it's just never gonna happen. So we can bring our tools to say, "I know that you can't see what's coming, "and I know it's really foggy and none of this data's "making sense to you, "I have ways of finding patterns in that data, "that can lead us in a good direction "and might come up with alternatives, "and then allow us to choose a better direction.
"But you gotta trust me with my tools, "the same way I trust you with your tools "to keep the lights on." - Right. Is there a way that when you're talking to a business person and you're saying this to them, is there anything that you can tell them or I don't know, tools that you can give them to help them get to this place of understanding? - I think that everyone can learn a certain amount of this tools in the same way that everyone can learn most everything. Some people have absolutely innate natural talents and find this stuff really easy.
And there are people who will never be comfortable with ambiguity or never be comfortable with the kind of design processes that often look to them like, "We're not getting anywhere, you're just turning in circles "and talking with customers and what not, "We need to get to work." There will always be people like that so I think that what has to be established is a mutual trust, you've got your processes, I've got my processes, they work really well together, but we need to use the right ones at the right time.
That's the biggest stime for innovation, is often, taking those quantitative metrics and applying them to innovation too soon, when a project's not ready, when we haven't found the answer when customers don't see the value yet, especially in big companies, fortune 500 companies, that need to control the innovation process almost always kills it, because it's done too soon.
So we have to find a mutual respect and trust, and a little bit of a mutual awareness, so that we can work together in a more productive, effective way. But they're two different cultures. They will never be one, and they should never be one, and they're always gonna have a little bit of a either uneasy relationship or if it's really working well it can be a beautiful dance. - Alright so let's flip the coin. What can design learn from business? - A lot.
Designers, especially design education, can be sometimes just really flaky. When you're dealing with the qualitative, who's to say that that's nice or that's ugly or this is beautiful or that's too much or this isn't enough. It's really difficult, it's even more exaggerated in the art world. In the design world, at least we can touch base with customers too see if customers find value in it or it appeals to them et cetera. But even then, there's a lot of ambiguity there and so there aren't necessarily always clear answers.
That requires clear direction. It also requires a comfort with quantitative reasoning, critical thinking and quantitative data. So if you look at a company like big tech firms for instance and this obsession with big data. The data tells us really interesting things. Sometimes it tells designers things they don't want to hear, and that's information we need to look at, we need to listen to, we need to integrate into our processes.
Design isn't really about my personal preferences and I love this color this week and that typeface and this kind of illustration style. Design really is more of a territorial practice where I'm making design decisions in the construction of this thing for other people, so I better know something about how they react to all these things. If I want to make an Eco product for the Eco conscious consumer, I need to know does bamboo make them think dirty hippies, or does it make them think slick celebrity, because it can do both and it does do both.
My choices as a designer in shaping something and constructing something, have to be informed by reality. It can't just be my fantasy or how I want the world to look like or I want the world to be, and that's a new thing for design because most designers, certainly in my day, I've got a fair amount of gray hair, when I was in design school we were taught to remake the world in our image, towards our preferences and that people would love it. For the most part no a lot of people don't love designers visions of the future from their personal aesthetic.
A good designer is able to assemble and construct something really wonderful understanding the impact it's gonna have and how people are gonna react to it. It's not totally prescriptive, it's absolutely creative but you can't design for people so that they have a meaningful experience without knowing what makes a difference in their life. That's why we do design research for instance. - Right. How does a designer know what that bamboo is going to trigger in a consumer say? - This isn't easy.
Again, this is always in the realm of ambiguity. We teach our students a bunch of tools to get at what we call triggers, the rest of the world calls them design elements, we call them triggers because we want to cast all these decisions as this decision is gonna trigger something in your customers. It's gonna trigger something in other customers as well. You need to know what that trigger's like. We teach them research techniques that help them understand and get from customers their reactions to these things.
They can be as simple as having a whole bunch of cards representing colors or materials et cetera and asking them, which one of these says honor or duty or security, which one of these makes you feel good, or warm, or successful? Often the abstraction of these concepts are so high that words aren't gonna work anyway. If I asked you, here's a bunch of photos, tell me which one says harmony to you.
That's a lot easier than me asking you, "Tell me about harmony in your life and what makes things harmonious, a lot of people it's easier to use a visual medium. We teach them to make these tools and use these tools and collect commonalities that represent not exactitude, again not optimization, of these reactions, but to have a deeper understanding of the reaction their design decision is gonna have for the customers they're trying to talk to.
- Interesting, it sounds like everybody needs a set of those cards. - The trick with those cards is that you sort of have to make them for yourself. Because you have to understand what they mean to you as a way of normalizing bias before you can start using them with other people. Maybe you can get away with selling them but yeah I'd love to teach everyone to make a set of those cards. - So, there's more and more talk these days about designers leading change in business.
Pepsi is a perfect example, in 2012 the CEO created a Chief of Design position to lead innovation in their company from a design perspective. What would be your advice to designers who are looking to get a seat at the table, who do not have one in a company? - There's a story I tell that is completely fictional, it's never happened, but it always happens, it's sort of underlying a lot of conversations.
When you get into that room, and all the seasweed or senior managers are there, imagine a conversation about moving forward with product decision or a service unit, the CEO turns to the designer and says, "Well you think we should do this one "instead of that one, why?" That's the moment of truth, right? How are you gonna describe why you think that's gonna be more successful for the company to choose rather than an alternative? Designers for the most part, aren't really prepared for that conversation, especially in school, we do a lot of things still in traditional design education where we tell people, "Well the work speaks for itself." Right? And we don't require them to be articulate or to be good writers or to present well necessarily.
What's left for a designer to talk about often is where their inspiration came from, what they saw in competitors, what their favorite preferences are around design elements et cetera. It's interesting but it's not usually very convincing. Now the CEO turns to the VP of Marketing and says, "Well you think we should do this one "instead of this one, why?" And the VP of Marketing says something like, "Well we polled customers and 63% more people want that one than this one." You're the CEO, which one are you gonna choose? Of course you're gonna choose the 63% more people want this one, that one, because it just sounds more valid.
That may still be the wrong decision, in fact it probably is the wrong decision because market research is, it's just crap. 95% of it is worse than wasteful because it's often leading companies and decision makers down the wrong decision path. But given the choice between this sort of accurate, confident, rationalization for choice, in this kind of wishy-washy ambiguous, "Well I kind of felt like it was this." What are you gonna do? Designers need to figure out how to have a better conversation about their design decisions.
We choose this form and these materials and this type face we choose these things because customers reacted to them in these ways. We have an underlying theme here around accomplishment and security and beauty and those things are supported by this, this, and this. And that fits strategically in our company because our company's themes are accomplishment, beauty and community. That becomes a confident conversation that a CEO won't feel stupid about if they overrule the VP of Marketing and choose this one.
It may even be what they're reacting to themselves but can't articulate and here's the articulation of it that inspires them, that's aspirational, that makes them feel like yeah this is the right decision but they're now given a discussion around it that's focused on value and it's focused on validation. - It sounds to me like what you're saying is that designer's actually giving things that feel tangible. - Absolutely.
They will never be completely tangible, you will never win this over numbers, right? But you're right you can give a tangibility to these often ambiguous esoteric atherorial decisions. But there often the same things that people are already feeling. People in the room may already be in love with this because it's more beautiful, it's more something. But they don't know how to have that conversation, they don't have that vocabulary, you have to give them the vocabulary for that yourself.
- Would it be fair to say that using phrases like, "I feel" and "I think" are killers? - I don't think that they're killers, I'm a big believer in I statements, because you speak for yourself. In that situation they're not as strong as "We talked to customers, they feel, they reacted, "They chose," essentially that's what the Marketing person's saying anyway right? But then melding both those sides the assured tangible quantitative with the atherorial, aspirational qualitative, that's a more powerful discussion that gets people excited.
The other thing is that we have to turn, we have to change a lot of the vocabulary, and one of the big vocabulary words that designers need to change is the word value, because in traditional business, value pretty much just needs money. Sometimes we can talk about functional value, performance value, this works better, this is worth more because it does more. There's three other kinds of value, that's the quant value then there's the qual value and we all know this value exists because we all feel it, we react to it, but we don't know how to talk about it and that's emotional value, identity value, and meaning value.
The qualitative value is almost always worth way more than the quantitative value, and most business people know that it's sort of out there, when you learn accounting, you learn two terms, book value, what the company's worth, close the company today, sell off all the assets, which might be a factory, desks, chairs, whatever, that's the book value of the company. It's what the accounting system and income statements and balance sheets say your worth.
Then there's something called good will and any time a company gets sold, gets acquired, or goes public, there's this immediate often surprisingly huge number of sum of money that gets literally shoved into the balance sheet under good will, meaning we don't know where it came from, people just like us I guess and we don't know where to put it because it doesn't fit the balance sheet anywhere but we have all this extra money we gotta do something with it, we shove it into this cell on the spreadsheet.
I'm sure when lynda.com got bought there was the book value and there was a bunch of goodwill. When Instagram was purchased by Facebook, the book value the day before the company was sold, 86 million dollars, what the books said the company was worth. How much money did they get? Well it was 1.1 billion. So over on this column the qualitative value 1.01 billion dollars versus 86. If you can have a conversation with the business person that expands the definition of value and show them that all the value, especially if they're an entrepreneur, all the value that they know that they've seen happen in other companies, that they want to make happen and grow, all that's on this side, but all your tools for creating and managing value traditionally, are only doing this side, this is what designers can help build.
Now you've changed the conversation of value and you've made a big place for design to happen. They may not be convinced the first time, but now you've at least opened the door that your tools help you with the 86 million, they're not doing very good on the 1.01 billion. That's where I come in as a designer. I can help you do this. And then you actually have to help them do that. You have to be good at that. - Design thinking is a huge topic these days and depending on who you talk to, there are different steps to that process, and different variations on when those things happen.
What is the version that you guys teach in your program? - You're right, design thinking has been in fact it's the beach head that's led design into business and led business people especially in tech, open their eyes to design. The first thing you have to sort of discuss about design thinking is that design thinking is different than the craft of design. Being a good design thinker which anyone can be good at, does not make you a designer.
Designers have feared from the first moments of design, other people telling them how to do their job because everyone has a preference, so the stereotypical story of the CEO who's wife's next door neighbor's dog walker's friend like purple, can you do it in purple, which just grates designers. Those are decisions about the craft of design, which is a craft that you learn, graphic design, fashion design, industrial design, interaction design, but design thinking even though it's used in those crafts, is separable, because it's a process for essentially taming ambiguity.
One of my faculties, Lisa Solomon's a fantastic author, has a fantastic book out, she's now starting to talk about renaming the MBA a master's in business ambiguity, because design thinking is one of those tools that leads you through the desert, or the fog, when things are ambiguous and allow you to get somewhere and it's nearly magic for people who have trouble with ambiguity or come from a traditional business background.
When I taught at Hoss, which is the business school at Berkeley, for a couple years, Sarah Beckman there, who's been teaching design thinking in business school for 25, 26 years, longer than anyone. I learned a great deal from her about really how distinct this modes of thought are, and how do you help people who aren't designers, who aren't comfortable with ambiguity, learn to become more comfortable. To me there's about four elements of design thinking that differentiate it from quantitative reasoning, scientific method, integrative thinking, other forms of approaching challenges.
The first is design research which is qualitative engagement with the market, with customers, with constituents, if it's not business for instance, and understanding them on a level of emotions, and values, and meaning and not just what they're willing to pay for, what their budget is, and what features they need. That leads you to what is essentially what is the most important part of design thinking which is re framing. And I saw this over and over when I taught at Hoss, where students would come in from the business school, and they already knew the answer, they knew what they were gonna create, and they just wanted to get to it.
Then we had them do these sort of four weeks, five weeks, six weeks of talking to customers, and doing this weird stuff, and they didn't appreciate it. In fact many people rebelled against it, because it just didn't make sense, it didn't fit the kind of background and tools that they used normally. But there comes that moment when you listen to your customer feed back and you integrate it, and you try to make sense of it and come up with insights and realize, "Oh, they don't even want what we were gonna make, "that's not gonna work, "but we did find this thing over here, "that they can't get enough of and you know what? "It's a better opportunity than what we thought "was an opportunity.
"We need to shift gears," and then people talk about the pivot, that's when the pivot comes from, it reframes the problem. We're not a this company, we're gonna be a that company. Well that re framing, that pivot, requires some pretty flexible thinking. The people who are dogmatic and often quantitative, or they're trying to optimize, they're trying to be efficient with their time, they're fighting needing to do that. So this is the most disorienting part of the problem, and we would get to the end of class, the end of the semester, and talk with the students and every single semester there was a handful of students who said, "You know what, six, seven weeks in, "I knew this was gonna be a failure this class, "but it was too late to pick up another class "so I couldn't drop it and pick up something else, "because I wouldn't have enough credits to graduate, "so I just gave up.
"I figured I was gonna get a terrible grade in this class, "I'm gonna make up for it, "I'm gonna pout my time in the other class, "so I just gave up fighting it." and that's when it started working. So when they were able to let go of the rigid structure that they require and just let it wash over them, they got to some place that was way better, they would always say, "We ended up with something way more interesting, "which was a better opportunity than anything we had "imagined coming into the class." And that's the process of design thinking, but it requires that re framing because you never really know what people need and react to.
The next pieces are prototyping, which isn't so unusual, although still you can run into people who your negotiating contract might say something like well I'm not gonna pay for prototypes, I'm only gonna pay for the stuff we're actually gonna use. You're laughing because you've seen this right? So prototyping in iteration is still sometimes contentious but especially in the tech world and in physical goods people get why that's important. Design thinking is a way of moving through those processes, and melding them with the other kind of quant processes that is driving a business's business model, and driving the financial model, and setting up for operations, et cetera, but it's a very different animal.
And so how the two connect is really critical because you're gonna have a lot of neighsayers along the way. I think that cultural difference is the biggest set of skills that designers need to learn, other people think differently, they literally see something that I don't see, sometimes that's good sometimes that's bad, and I need to help them through this process because it's really disorienting to them. Those collaborative communication personal skills end up probably being the most important skills.
And they're the most important classes that we teach. Not that anyone would ever come to our program, to learn those classes, because they want to learn design thinking or sustainability or finance or whatever, but it turns out that those are the most important classes. - So you said, as a designer, you go out and you'll interview people and sometimes they'll see things that are different from you. And sometimes that's good and sometimes that's bad.
What could be bad? - What could be bad about seeing other things? I don't think that there's necessarily, I should rephrase that then maybe it's not bad, what's bad is if you can't integrate the two. I remember Sarah grabbed a bunch of white board markers and threw them on a table in front of the whole class, and said, "You, what do you see?" and someone said, "Well I see six white board markers," "You what do you see?" "I see three red ones and a black one and two blue ones," "You what do you see?" everyone was describing something different, and she said, "Nobody mention the three that fell off the table." and everyone went, "Oh yeah, three fell off the table." There are more things to see than just what you get.
The more we see, the more different perspectives we get on the problem, the more informed we are, that's the quant and the qual data again right? I guess what's really bad is if you don't have a lot of different perspectives, or if you're shutting down perspectives. I guess what I meant by sometimes it's bad is, sometimes people see things and they're so confident about what they see is being the most important thing, that they discount everything else. - Got it.
So when it comes to design thinking, there are aspects of this process, like ambiguity, that can be a little challenging for business people. Are there other things besides ambiguity that are challenging for business people or is that really the big one? - That's a great question. Ambiguity's a big umbrella. There's a lot about the design process that falls under ambiguity.
I think that there's a lot about design elements and color meaning and symbolism that would fall under that and that's just still part of ambiguity. There is another thing that is really difficult for business people to understand, and that is that, two actually, one is that people are not rational actors, and this is drummed into them in their econ classes, neoclassical economics, people are rational actors. Sounds great.
My response to that is name one, show me one person who's rational. This is justification for only looking at the financial value and the functional value, price and performance, price and features. That's what the history of product development has been built on. And then along comes a company, whether it's an Apple or a Hermez, or a Nike, or a whatever, and people pay more for things. Why are you paying more for that, you're an idiot to pay more for that. It's not that that company is hoodwinking us and telling us a bad story that makes us be convinced it's worth more, it is worth more or we wouldn't part with our money.
It's just that the value that's being derived is not on this column it's on this column. It made me feel good. Well if you were a rational actor, you're not gonna buy the thing that makes you feel good, in this world, when you look at it, but if you look at people as wonderfully irrational, that's what's good about people. Of course you're gonna buy the thing that makes you feel good because that is a function on one level right.
But business people, traditional business people, especially the sort of ones way out here on the edge, called quantitative optimizes, they have a huge problem with that, it just doesn't make sense. You're just a fan boy, you'll buy anything that they make. No, but I see value here and I feel value that it's providing me that you don't see. That doesn't mean it's not there. When traditional business people look at design, they have to understand that there is value there, that is real value, it ends up being dollars and cents, but it doesn't fall into the categories that they're use to and many of them just won't believe it.
Dogmatically will not believe that that's the case. Does not happen because they've been told their whole business career that it doesn't exist. So when someone says to you, "People won't pay more for that, we gotta get the price down "that will be too expensive, people won't buy it." I tell my students, look at what they're wearing, do they have slacks from Kirkland, you know the Costco brand, are they wearing the cheapest no name or inexpensive Timex watch, do they drive a KIA or a Hyundai? No they're probably driving a Porsche or they want to, they want to have a Porsche.
They might have a Tag Heuer watch or a Nike. They're not buying the cheapest, even the people who say , "People won't pay more for things" don't act that way themselves, but they don't see it, and sometimes pointing that out gets them really upset. Because it shows them that they don't know everything. Okay the other way that business people have a problem with design is that the very purpose of business has to be questioned. Especially in this country, especially in the U.S.
Business is not just there to make a lot of money. That's not the only reason. We teach our students that there's nothing wrong profit, nothing wrong with money, go make money and go do great things in the world, but if that's the only reason you go into business, you will not ultimately be satisfied, and you will likely make a lot of decisions along the way that will dissatisfy a lot of other people. Recently we just saw the examples of Volkswagen cheating on it's emissions tests, right? That slimy guy who owns Touring Pharmaceuticals who raises the price from 13.50 for the AIDS drug pill to 750 dollars and yeah they talked him back but those are businesses run by people who only see the money.
They don't see anything else and usually that's a recipe for, at least over time, destroying a business. That's what happened to General Motors in the 70's. The bean counters who only saw the quantitative ran those brands into the ground such that nobody wanted them anymore. Barely saved them to this day. So we have to help business people realize that there are other reasons to be in business than just to make money.
You still have to make money, you gotta stay in business. But those other reasons can be illuminated by the processes that we use in design. Not only, but design research, talking about the qualitative, getting from customers their deepest values, meanings, emotions, et cetera, can help a company be successful, have great relationships, create great experiences, make money, but also have a reason for existing beyond just the money, because it's ultimately dissatisfying and unrewarding and it leads you to make these terrible decisions that either ruin your brand or ruin your customer relationships, or ruin your employee relationships ultimately.
- There's qualitative data, there's quantitative data, traditionally you're using both in any design research, in any research project, is one more important than the other, one stronger than the other? - Let's see. That's an interesting question. I'd say that both are important. I will not say they're both equally important. I will say that both are important at different...
Any can be more important at different times. If you're a finance guy trying to figure out a problem in your accounting system, or if your a six sigma guy trying to optimize the quality in a factory, probably the quant data's gonna be a little more important, is gonna lead you to solutions faster. If you're trying to message to customers or maybe you don't have customers, maybe you're a non-profit or you're a government agency and you have constituents and there's no money changing hands.
The financial may be out of it. Therefore the quant may be reduced somewhat and it's all about the qual. Often in AID relief within the NGO world people will throw away the food that you drop to them from the plane because they're starving because they don't know what the food is or it's not the food they eat or it smells really weird they don't understand the problem the same way you thought they did. They'll take the blanket out because they can figure that out.
Often the qualitative issues are the biggest ones that determine success or not in those kinds of situations. So I don't think that you can say one's more important than the other but certainly during the innovation process you need to listen to some of it more than the other until the right time when you need to validate something. So in brainstorming, forget the quant. Let's go wild, let's go wide and see how many opportunities we can uncover.
When we start converging on one, we may really need the quantitative to help us figure out where there's a market for that. Yes these three people loved this idea but turns out they're the only three people that can ever afford it so maybe we don't listen to them maybe we listen to the 14 hundred people that told us this. That's where the numbers can really help us validate. You can't ever lose balance but you can raise one or the other at different times, and being a designer, we have to check ourselves about when those times are just as much as business people non designers have to check themselves and suspend their disbelief at certain points in time.
- So you say, 95% of Market research is worthless. - Yup. - What is the difference between Market research and design research? - Design research focuses on the qualitative, and uses techniques that uncover pieces of information and types of information, critical stuff, that could never be uncovered with quant techniques. I'll give you a couple quick examples, some people cannot even articulate what their desires are or what their hopes are, their dreams, or even what their needs are.
So how are they gonna tell you on a survey? You're not there, you can't interpret it. The biggest problem with research is, you can't ever ask anyone the thing you want most to know from them, because you can't trust their answer. Famous examples of Market research that polled people to say what's your favorite television station? And it always was PBS. Everyone wants their favorite station is PBS. But if you look at the Nielsen ratings, and watch what people watch, now it's almost impossible right? There's so many channels.
It was not PBS. So were they lying to you as a researcher, well kind of but not really. They were telling you their aspirations. They wished that they were the kind of person that watched PBS more. Well that's actually really important information but that's not the answer to the question you asked. You can never ask something that the thing you want to know, you have to triangulate it. So you have to use qualitative techniques to triangulate that information. It's not easy, it's ambiguous.
But it's worth a lot more because it gets you the understanding of your customers or your constituents on those qualitative levels that have the most value than the on the quant levels. I'll give you another example. Thankfully this is a technique that's not used very much anymore. It's called a mall intercept, it was really big in the 50, 60, 70's and it makes so much sense, it's all the wrong decisions for all the right reasons. You want to poll a lot of people, someone had the idea of saying, "Well someone's sitting at home or you call them up "on the phone, they're not shopping, they're not in a "mindset of shopping, we're not gonna get as good of answers "why don't we go somewhere where people are shopping "and then ask them questions about that they want "and what they need because it's a better contest.
"Makes a lot of sense, we'll go to a mall." then the quantitative optimizer engage and say, "Well the survey has to be the same for everyone, "because it has to correlate. "You can't ask these three questions and not have these "three how are we gonna mix the data together and figure "out what's going on? "So we'll have a standard survey and they have to be "simple questions because you can't have a complex "conversation especially if it's gonna be controlled. "And really that doesn't take anyone special, "we can save money by doing this by hiring people "at minimum wage, "but instead of paying them by the hour "because we know they're all lazy, "we're gonna pay them by the survey, "so we're getting our moneys worth.
"They don't ask a lot of people lot of questions, "they don't get paid very much." now this sets up this wonderful situation that is why people are not rational actors. Nobody like to interrupt other people, when they're in the mall they don't like to be interrupted so already there's sort of a social constraint against doing this and they're getting paid by the survey so their time's really valuable, they gotta get through this stuff, what if they can't get some one who wants to have questions asked of them or they're taking to long to answer questions.
You've set up a perfect situation where the smart guy is gonna do what, you're laughing, you know exactly what's gonna happen don't you? - They fill them out. - They go to the food court, they get the giant Pepsi, they sit there and fill them out, but they're not dumb, they cannot all be the same answers because then it's obvious that they filled them out. So they're gonna vary the answers. Okay, what's the value of that? It's all fiction, none of it's real. It's randomized. Just put it right in the trash, don't even look at it.
Now that's a funny example and it didn't happen in every situation, some people are more honest than that, but there's an example of quantitative research being controlled in quantitized ways to optimize it that totally misses the point. In fact not just missing the point, it generates terrible data that's gonna run you down the wrong direction. And it's not even getting at the stuff that really drives people. If you have time I have another story for you.
- Yes. - So there's a man named Michael Perman who was the head of Marketing, VP of Marketing at Levi and he told this story to me in my business class, where he and his team are out, I think they were in the hinterlands in Texas, no where near anywhere, and they were out on an expedition to meet customers and talk to them. They were doing qualitative research, design research, and as he tells the story, if I have this right, they're in this car driving, driving in the middle of nowhere because the woman they're gonna meet next that's on the interview sheet, she lives in a motor home, a mobile home, she's like an hour away from the nearest Walmart, and she's another hour away from any place that she can buy a Levi, she's out there right? And they're looking over the answers to her survey identity, and they're not mean but they're kind of joking around that this woman has no business buying Levi's, Levi's is a premium brand, she clearly can't afford these jeans, why isn't she buying whatever the house brand is at Walmart.
This is what's wrong with America, people being fashion conscious and spending beyond their means and da da da da da da. So they end up meeting her and she invites them into her home, and what they discover is, it floors them. And when he starts telling this story at this point, he actually starts crying in my classroom, because when they figured out why she's willing to drive two hours, an extra hour to go buy Levi's and it's important for her to get Levi's for her kids, it stuns them.
She says, "I don't want my kids growing up thinking that they're "poor because if they do they're never gonna get "out of here. "There never gonna make anything of themselves. "And I don't want their friends thinking they're poor "either because kids are terrible to each other. "I need my kids to feel like, to believe that they "can have a better life and build something more "than I have." This was one little way that she could help make that happen.
That's astounding. She's not buying them because they're Levi's, or because the commercial was cool, she's buying them because what she cares most about in life beyond most of her means, is that her kids build a better life than she has. You don't get that out of a survey. You get that out of meeting people, having a conversation, and using qualitative techniques. He talks about it when they get back to the office. First of all this is the VP out there, that almost never happens, other people can do that because your time's valuable right? They get back and he talked about how they had a sort of completely renewed commitment to their own company because they're not just working for the shareholders, and they're not working for the bottom line, and they're not working for their bonuses, they're working for this woman's kids, because they don't want to let them down.
And that to me speaks of the power of design research. You don't get that out of Market research. Now it doesn't mean that Market research can't be good. What we teach our students to do is, you do the qualitative research first, which you can't afford to do a ton of, you speak to way fewer people, but that uncovers what's important. You take those learnings and now research the hell out of it with quant. You can go wide with 15,000 people if you want, but now you're asking the right questions.
Take the results of that, put it back into quant. Go do deep research, so deep, wide, deep, wide and you just go back and forth. But if you start with the quant and you start with the easy questions, that are easy for people to answer, and oh my god if you start with demographics, who cares if someone's between 15 and 21 or 22 and... It makes no difference. It never made a difference and it makes even less now. You want to know what drives people because that's what drives their decisions.
Any good salesperson will tell you, if the conversation is about price, I've already lost the sale. Because there's no way I can undercut someone's price. My conversation's about aspirations, needs, desires, et cetera. That's how you make a sale. It sounds kind of it sounds negative that you would be selling someone based on their aspirations, it sounds manipulative, but the reality is we want to feel engaged and empowered and that our desires are being met.
We want meaningful experiences, we're willing to pay for them, but we can't do this accidentally anymore. We can't do it intuitively anymore. We have to do it deliberately. To do it deliberately, to help this woman's kids have a better life, deliberately, we have to take in new kinds of information, we need new tools to build the things that's actually do improve their lives, not just have the patina of improvement, to give them back to them.
That's a different set of skills. That's the best of what design can do. It's not all design can do, sometimes design really is about trend and appearance or what not, but that's the best of what design can do. And you marry that with smart business techniques and that's how you can be successful, make a lot of money, and lead change in the world that's positive, and meaningful, and sustainable et cetera. - Awesome, Nathan thank you so much for being with us today it's been a total honor.
- It's my honor as well to be here.