Designing Ideas

The Jakarta Post
Features - 15 April 2007
Published as "Why some firms perform well while others don't"

Dewi Susanti & Kayee Man

What makes some industries perform better than others? What makes a company, among many in an industry, excel in the market while many linger and languish?

In a recent visit to arts and design industries in Bandung, Yogyakarta, and Bali, Dewi came across an interesting observation that may give a clue to the key to success and failures in relation to the above questions.

Of all the industries she visited, two stood out from the rest. They shared some similarities: they took advantage of local resources and skills, they were owned by well-traveled Westerners living in Indonesia, and they employed Western or internationally-educated designers.

Of the remaining industries, the more successful were owned by Indonesians who were well-traveled and designed their own products. The less successful industries did not design their own products. Some of them worked with international designers or companies, who came over to order products with specific designs. Sometimes, even this face to face meeting was eliminated when designs were faxed over by the overseas buyer.

When asked what their challenges were in promoting their products, the less successful industries mentioned design as the main obstacle that prevented their products from penetrating deeper into international markets.

There are many reasons why some industries perform better than others, but in this article, we will focus on only two. The first one is the ability to design, and the other one is to appeal, to sell if you will, to a bigger market. The two, as you read on, are actually connected.

From the example above, it may seem that the ability to design is relevant only to the arts and crafts industries. But in reality, design penetrates deeply in almost every industry there is. Managers design paths to achieve goals, create internal control systems, reward systems, policy and company culture among other things. Teachers design lesson plans, tasks, and lectures. Computer programmers design software, networks, and information flow and storage systems. And so the list goes.

When we design a system, say for work flow in an office, the better it works, the more time is made free for us to work on value adding tasks. If the work flow in our office does not function properly, many people will be faced with problems that we or they or someone else in the office will have to solve. So naturally, the better we can design certain things, the better it is for us to take on bigger tasks.

Design requires thinking. In the example of the arts and design industries, the ones that don’t do so well as a company are those that only manufacture products. In these cases, having the production skills for a particular product would be enough. But what happens when the product no longer sells? What happens when the clients find cheaper manufacturers?

Dewi met such an industry in which the owner, over the course of the years, had found it more and more difficult to get the raw materials he needed. When asked what he would do if he couldn’t get the materials anymore, his response was simply to close down his business.

In addition, many manufacturing companies in Indonesia and throughout the world have recently lost businesses to China, for its ability to mass produce things cheaper and better. Many of them were forced to close down or reduce its production and market significantly.

So what could businesses in this situation do? The answer that we would like to put forward is design, which we would repeat, requires thinking. Designing is planning ahead, envisioning how things would run, thinking about who would be the target of the design and how to appeal to these people, anticipating problems that could be encountered and overcoming these problems before they even occur, and last but not least, selling the design and the ideas contained within.

As a colleague recently concludes, design adds value and enhances life experiences. And because of this, design can result in an increase in economical value.

An example given by B. Joseph Pine II and James H. Gilmore in “The Experience Economy” (1999) comes to mind in relation to how added value and life experiences can add economical value to products. Suppose we want to start a business in the coffee industry. The cheapest coffee we can buy is when it is purchased in bulk directly from the farmers. If we put this coffee into packages with brands and sell them in supermarkets, we can sell the coffee at a higher price.

If we ground the beans, add hot water, put them in cups, and sell the liquid off the counter, we can sell the coffee at an even higher price. So the price increases as we add more value to enhance the experience of drinking coffee, from having the cup brought to the tables around which customers sit in their soft-cushioned sofas, playing certain kinds of music to boost the ambience, up to serving it in a café with a view.

The cost of coffee sold in different forms with various values and experiences according to Pine & Gilmore can range from being cheaper than a dollar a pound (or a fraction of a dollar if you buy them off the warung stalls in Jakarta) up to as high as fifteen dollars a cup if you buy it in a café by the Grand Canal in Venice (Pine & Gilmore, 1999).

Adding value and life experiences often require us to think across different fields. In the case of the coffee business, the cup we serve the coffee in, how service staff deal with customers, the machine we use to ground and make different kinds of caffeine drinks, the architecture and interior design of the café, the kind of music we play, the branding of the café, the variety of the menu, the color of the flower we put on the table, how the tables are set, and many other details, can contribute directly to the added price we charge. It’s all about design.

Think Starbucks. Same coffee beans can be found in Sumatra, Sulawesi, Java at a tiny fraction of the price they are sold at in Starbucks’ stores. But without the brand, the ambience, the people, the design of them all, the coffee simply won’t sell at the same price.

So how do we design to broaden the appeal of our products to the market? A simple principle: if we know our market well, we will know what would appeal to them, or at least what would not appeal to them. Market research is also part of design of products, an important point that many tend to forget.

From the comparison of the arts and design industries mentioned at the beginning of this article, the least successful companies have no direct contact with their market. Their production depends on orders from their clients. They don’t design their own production in the broader sense of researching, planning, envisioning, targeting, anticipating, and selling their products.

The better performing arts and design industries sense for what kind of things may appeal to a bigger (international) market, which seems to be sharpened by an exposure to multicultural environments. This exposure is most direct by means of traveling and education in multicultural environments.

Why would this exposure be important for sales? Again because of the simple principle that the more we understand the market, the better chances we have for selling something that appeals to the market. If we want to sell to the Japanese market, for example, the more we know about the culture, the people, the environment, the value system, etc., the more likely we can sell our ideas to them.

Now we’re not suggesting that everyone should travel and get their education internationally. We realize that gaining direct exposure to different cultures and access to international education may be limited to a privileged few, but all is not lost as there are more affordable ways to access different cultures as well.

If we want to know more about the Japanese people, we can read magazines, news and books by and about the Japanese; we can use and observe its products, play Sudoku, read its comics, watch its films and television programs; we can make friends with the Japanese or those who know about them, go to Japanese restaurants and drink sake with them. And while doing all these activities, ask this question and think: what makes something Japanese? What would appeal to the Japanese?

The more exposed we are to people from different cultures and backgrounds the more likely it is for us to differentiate one from another. Thus, making friends with people from backgrounds other than our own, observing certain cultures through their products, or traveling to areas within our own cities we rarely go to can be very revealing.

Again, while doing all these activities, keep a question at the back of your mind for the time when you see something that strikes you: how can this relate to the design of your idea? For many of us, thinking or not thinking about this may mean the survival or death of our line of business – our very own livelihood.