German Marketing Association Conference Hamburg
9 November, 2004
Dr. Stefano Marzano
CEO and Chief Creative Director Philips Design
Differentiation
In today’s saturated and commoditizing markets, differentiation is more important than ever. But differentiation on the basis of technology is no longer enough. Due to the high investment involved and growing consumer demand for interoperability, technologies are now often shared across companies and are therefore losing their differentiating effect. As a result, the role of design in representing brands is greater than ever before, because the real differentiating factor is the way technology is shaped. What I’d like to talk about this afternoon is just how Design can best provide this differentiation.
Design, creator of value
There is no question that Design does add value to a business. A recent study carried out in Denmark showed that companies that adopted a comprehensive and systematic approach to design increased gross revenue by 40%; while in the UK, a similar study showed that design-led companies have outperformed the UK stock market by 200% over a ten-year period. And we only have to look at successful companies like Virgin, Starbucks and Apple to see how design is used to effectively differentiate their brand in the market.
What do we mean by Design?
But what do we mean by Design here? Does it mean simply an attractive or striking appearance? A good logo, or corporate house style? Is it just styling? If so, then “good design” in that sense is already becoming commoditized. Many companies already spend millions on rebranding operations, with greater or lesser success. Take the oil company BP, for instance, with its new flower logo, or, less successfully, the British postal service, which was forced to abandon its rebranding from the Royal Mail to “Consignia” when the public found it pretentious and overblown. If this is what we mean by Design, then it will ultimately fail to provide the differentiation we want. The same applies to “arty” product design, the sort of strikingly individual designs produced by Philippe Starck, for instance. They may help provide differentiation for a while, but it is easily imitated and soon becomes a commodity.
More than styling
So to be the key success factor in business today, Design needs to be more than just styling. Ideally, Design should be able to identify for companies what people value and want – and are prepared to pay a premium for – even down to the level of the individual consumer. That is, of course, a difficult challenge, but it’s one that I believe we are increasingly able to tackle, and I’ll describe some of the ways we’re approaching it at Philips Design.
Philips Design
First of all, I should explain that, at Philips Design, we take a broad view of design. We see design as being – above all – about people: how they relate to themselves, each other and their surroundings. That means we make use of insights and methods from the human sciences: sociology, psychology, anthropology and cultural ethnology. Taking this as the basis, we then need to combine the knowledge we gain about people with knowledge of technology and materials, so that we can actually make the things people want, and we have to apply aesthetic design disciplines to give those things appropriate forms and colours, all the time taking account of the semiotic and sensory codes people use to interpret the world around them, so that we can, as it were, “speak” to them in the right language. And not least, of course, we have to have an eye for commercial realities and suitable business models. It’s only by combining all these skills that you can begin to bridge the gap between what people want and what technology and business can deliver.
Understanding people
But the key factor in all this is understanding people and what they will want in the next few years. So let me describe first of all how we set about understanding what people’s future needs will be in general terms. After that, I’ll turn to the seemingly impossible commercial problem of how you can provide people with the things they want – as individuals.
Research
At Philips Design, for the past ten years or so, we’ve been applying methodologies and insights from the social sciences to analyse current societies in terms of their key components and drivers. We take relevant research into social, cultural and visual trends by various international institutes and universities, and combine it with our own research. All this gives us a good understanding of people around the world: how they live, what they cherish, their attitude to technology, and so on. In particular, it allows us to identify emerging trends and underlying movements – both short- and long-term.
Long-term future scenarios
To develop ideas for the long term (for five or ten years’ time), we generate hypotheses, directions and strategies about what might constitute desirable future qualities of life for people living in particular situations. We use these to create scenarios of realistic life situations and experiences, and define roadmaps to help us get there. These scenarios specify what given individuals might want to do in particular circumstances, and how future products or services might help them to do it.
Personas – representing real people
In order to try to get closer to the individual, we also create what we call ‘personas’. Personas are hypothetical archetypes, or “stand-ins” for actual users, which drive the decision-making during a project. They’re not real people, but they do represent real people for us during the design process. They’re not ‘made up’, but emerge from our in-depth research into people. Although they’re imaginary, we define them as precisely as we can, complete with names and personal details, to make them more realistic. In particular, we focus on their goals: what do they want to do? In that way, they serve as a perpetual reminder of who our users are and how we should approach them. Although they don’t actually enable us to engage with consumers on a genuinely one-to-one basis, they do help us get significantly closer. Before moving to the next phase, we put these scenarios and personas to the test, submitting them to a panel of international experts for filtering.
Innovative integration
Then comes the task of developing new solutions for products, systems or services, based on these scenarios and personas. To do this, we bring together a variety of people to share and develop ideas – engineers, marketers, strategists and designers. Given their very different professional backgrounds, this is no easy task. However, to facilitate their discussions, we’ve developed a set of skills based on visual language. This enables us to lead the brainstorming sessions in such a way that they can all understand each other and participate fully. Again, the results of this phase are given a ‘reality check’ by international experts.
Design articulation
Finally, there’s design articulation – the actual shaping of those ideas into tangible, or at least visible, solutions. These solutions may be anything from a product (or service) to packaging, from a book to an interactive interface, or from a fashionable electronic garment to highly sophisticated medical equipment. This calls for more traditional design skills, so that we can give abstract ideas a concrete shape, providing them with colour and visual expression.
Testing
The ideas that emerge as most promising are then given highly realistic visualizations – life-size objects you can almost touch, accompanied by video clips of the personas using them in plausible future situations. These are then subjected to testing by being shown to selected audiences or the general public in the form of exhibitions or media presentations. A good example of our long-term scenario development is our ongoing Vision of the Future project, the most recent part of this being La Casa Prossima Futura, which has so far been exhibited in New York, Milan, Paris, Hamburg, Vienna, Tel Aviv and China. We regularly undertake such exploratory work for specific Philips businesses as well as for external clients.
Memories of the future
This testing process gives us useful feedback on the suitability of our scenarios. At the same time, we also plant in people’s minds what the Swedish neuroscientist David Ingvar called “memories of the future.” Ingvar showed that thinking about potential future developments opens your mind, so that you’re ready to see the signs relevant to those developments if and when they occur. He found that the brain uses plans and ideas just like real memories and experiences – as a way of filtering information and guiding decisions. In effect, these “memories of the future” potentially lead to new aspirations and wants.
Short-term future scenarios - cultural scanning
For the short term, we carry out a rather different sort of research to find out what colours, shapes, finishes or user-interface styles will be relevant to consumers between now and 2 years’ time. The process of finding these visual codes – at Philips Design we call it “Cultural Scanning” – involves looking at what’s happening out on the streets around the world. It enables us to say with considerable accuracy what’s going to be “hot” in terms of sensory appeal in the very near future. We then apply these codes to existing products, to express brand qualities like “young”, “fashionable”, or “dynamic”, and get them to market very quickly. Familiar examples of this are the Philips Portable Audio range, with their masculine, muscular look; the Cool Green TV, an interior-furnishing TV; and the Billy blender, a lively character who helps out in the kitchen. All these were produced within the present Philips product creation process and business model – practical solutions that could be implemented immediately.
The challenge - true customization
But this only takes us so far. Although the use of personas helps us keep close to reality, we’re still not really designing for the individual. Everyone’s wishes are slightly different, but, for commercial reasons, it’s impossible to make a product that will suit everyone.
However, there are a number of ways around this problem.
1. Simple mass customization
The simplest and most familiar way is the sort of mass customization currently used by Dell, Nike and mobile phone makers. Dell allows you to select particular features or configurations from a number of options at the moment of purchase; Nike lets you specify the colours and symbols of your running shoes; and for your mobile phone you can buy clip-on covers or download ring tones, screen graphics or logos. But this is only customization up to a point, since the options are limited to those prescribed by the maker or supplier, and, in the case of Dell and Nike, have to be specified before sale and cannot be altered later.
2. Open tools
A more sophisticated possibility is to let people provide the customization themselves by providing them with something they can adapt to their own purposes after the moment of sale. An example of this is the Philips Pronto family of remote controls, introduced in the late 1990s. The Pronto can be used to control anything with an infrared eye – TVs, audio systems or lighting. Using special software sold with the product, people can decide what they want to use the product for and can create and customize their own interface. The product has proved so popular that groups of enthusiastic users have formed special communities on the Web to share programs they’ve written for their Pronto. The success of this product shows that people really appreciate it when you provide them with a product that is not static, but instead one that you can adapt to your changing needs over time.
Of course, developing this sort of product – what we call an “open tool” – requires a radical change of focus for designers. Instead of designing finished products, they have to design for potential uses, building in flexibility and allowing for sustainability and evolution. In a recent project, we developed a number of devices like this, that are relatively undefined to start with: users can specify what functionalities they want, when they want them. The tools also change over time, adapting and shaping themselves to their user’s habits and needs. One such tool is the Open Desk, a device with a touch-sensitive display for manipulating digital media. Another is the Open Frame, a versatile mobile device for easy constant access to digital resources and services.
3. Ambient Experiences
A third possibility is to create unique experiences for consumers, rather than just products and services. The advantage of an experience is that it is not as easy to reproduce as a product or even a service.
But how we can customize experiences? Of course, experiences are, by definition, already highly personal events. We all undergo an experience in a slightly different way, since it is our own personal impression that we construct from our emotional responses to certain sensory stimuli.
All-embracing
A successful experience is all-embracing, from the moment you first encounter it – your first impression – right through to the end, and beyond, when it becomes a mere memory. It needs to surround you; you need to be immersed in it. Every tiny detail needs to be coherent with the experience, and any jarring note can ruin the entire effect. As the business guru Tom Drukker once said, “When you’re on a flight, a simple coffee stain on a tray can set you worrying about how well the airline maintains its aircraft.”
Certain businesses have traditionally always focused on the experience surrounding their offering: restaurants, hotels and theme parks, for example. But in fact almost any business can benefit by focusing on the experience surrounding their product or service – and the quality of this experience can provide very effective differentiation from the offerings of the competition.
Ambient Hospital Experience
Let me illustrate this by describing a project we undertook recently for a hospital in the United States. The hospital wanted to develop a new radiology department, and since it used Philips diagnostic scanning equipment, it asked Philips for advice. Together with our colleagues at Philips Medical Systems, and talking to hospitals both in Europe and North America, we started developing ideas about what the ideal total hospital experience might be like – and what is actually feasible. We realized that an appropriate experience would create great benefits for all parties involved – the patient, the clinical staff and the hospital management. We talked extensively with these three groups about what they wanted from a hospital environment, brainstorming with them on ways we could help by manipulating that environment to create the ideal experience for all of them.
Patients – reassurance, calm
Patients, for example, can be helped to overcome their fears and to make a faster recovery when they are surrounded by a calm, reassuring atmosphere. This also makes it easier for staff to carry out their jobs – patients undergoing a scan are relaxed enough to be able to hold their breath long enough at the crucial moment; and children will not resist when being placed in the scanner.
Staff – reliability, pleasure
Clinical staff want to have reliable equipment that performs well and is easy – and even pleasant – to use.
The hospital – stronger branding
And the hospital itself will benefit from positive experiences on the part of patients and staff. Patients report favourably back to family members, friends and the local community. Staff do the same at professional meetings. In that way, over time, the hospital creates a strong brand.
Product design as the first step
Of course, a good product design can in itself go some way to creating the right atmosphere, and over the past decade we’ve been working to improve the experience of patients and staff through the design of our equipment. For example, we’ve made scanning systems look less forbidding by using rounded shapes, reducing their footprint, and carefully researching soft colours. We’ve also made the patient zone of the scanners more open, through a flared opening <Intera Enterprise>, side entry, <Panorama> and by making it more transparent and less claustrophobic <Intera 3.0T>. And for staff, we’ve introduced interfaces that are coherent in design and functionality across many different types of equipment, so that staff can move easily and quickly from one to the other. We’ve also tried to make the interfaces pleasant to touch and use.
Now, a holistic approach
But we discovered that there was much more we could do, creating a total, more customized experience in line with the desires, preferences and interests of all those involved. Let’s have a look at the result.
The Ambient Hospital Experience
When patients enter the doors of a hospital or imaging centre, they enter a foreign country, where the landscape is unfamiliar, the customs alien and the language strange. In a conventional hospital, you’re moved from room to room, and are generally given little idea of what’s going to happen next. You’re usually separated from relatives or friends, and it can all be rather confusing and frightening.
Personal room
To overcome this problem, we combined all those rooms into one – a personal room that’s more like a comfortable hotel room, where family members can be with you. Besides comfortable sitting and changing areas, the room also contains a display on which you can watch an instructional or entertainment video while you’re waiting. The display also doubles as a mirror that you can use to check your appearance, or reapply your make-up when you leave.
Personal mood atmosphere
When it’s time for your examination, you walk directly from your room into the exam room. The atmosphere immediately makes you feel at ease – because you’ve chosen it yourself. The credit-card-sized “mood token” you received when you checked in triggers your own personal choice of images projected on the walls and ceiling lighting. So far, we’ve developed three atmospheres: one with cartoon characters for children; another featuring nature scenes; and a third showing meditative images – but obviously any scenario would be possible.
Human contact
Normally, staff leave the patient alone in the examination room and retreat into the control room, from where they monitor the scan through a small window. It all looks like a bunker and can leave the patient feeling abandoned.
To address this, we opened up the control room as much as possible, eliminating unnecessary walls or substituting large picture windows. The patient and the professional stay in visual contact through a two-way video link, so the patient never feels alone.
Images to help the process
The projected images can also help the patient hold their breath for the required length of time, by means of a clouds count-down or, for children, the image of a seal swimming under water for the right number of seconds.
Souvenir
When the scan is complete, the patient returns to their room to get dressed, and arrangements are made for follow-up appointments. On leaving, the patient is given something – a leaflet, or some other token – to round off the experience positively.
4. Interactive networked communities
In what I’ve just described, patients can customize their experience to some extent by choosing from a limited set of options. But otherwise, you could say it remains a relatively passive type of experience, something that you undergo rather than something you actively create. But I’d now like to look at another type of experience that is more freely customizable.
Transformation
You may recall that Pine and Gilmore, in their model of the evolution of economic value, envisage a step beyond the experience as such. They call it “transformation”, a type of experience that helps people to actively achieve their personal goals and greater self-fulfillment. Such transformations not only engage people emotionally, but allow them to add their individual input.
At Philips Design, we’ve been looking at ways we can provide these transformational experiences, and in particular at products and services that facilitate interaction between people in networks. In such networks, people take an active and initiating role in customization, since they themselves decide what they want to find out or communicate, and to whom. In essence, they, and not the manufacturer of the product, decide what is relevant to them.
From two-way to multi-way contact
A familiar form of this type of network is Amazon’s system of book reviews. People are encouraged to write reviews of books they’ve read, and these reviews are used by other visitors to the site to decide whether they’d like to read the books in question. These people also contribute to the network by evaluating the review as to how helpful they find it. In this way, the system facilitates a multi-directional exchange of economic, informational and emotional value. From a one- or two-way buyer-seller experience, Amazon now provide their customers with a multi-way, networked experience which enables them to find the books they want, and introduces them to new books that are relevant to their interests. This is people interacting with people, creating both a shared and an individual experience.
Living Memory
In a collaborative project for the European Union called Living Memory, we explored how communities develop online and offline, and how people interact within them. In a small self-contained neighbourhood of Edinburgh, we studied how people normally operated in the community – the places they went to, the people they met there, what they did, and so on. We then set up closed computer network that could be accessed from various physical locations where people tended to gather or interact, and we developed appropriate interfaces for those locations. Using these interfaces, people could then enter all sorts of information, ideas, comments, questions – anything they liked – into a database. The database was designed to mature over time, so that material that was used a lot would always be accessible, while material that was only accessed rarely would gradually fade and disappear from the database – rather like in human memory. A network like this allows people to keep in touch as a community, even if they live far apart, lead complex lives, or keep different hours.
Coffee-bar table
This is one of the interfaces we came up with for use in a coffee bar. It’s a table with a touch-screen top. To take information away with you, you drop a solid-state token in, the information is downloaded, and then you just remove it and take it away with you.
Community networks like Living Memory could be useful not only in urban neighbourhoods, but also within companies, schools, colleges, churches – and even in families.
Designing customization
I’ve talked about how design can help to customize products and experiences in various ways:
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by enabling people to customize a product after purchase;
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by providing an experience, especially one that they can customize themselves; and finally
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by providing a framework within which people can create their own transformation by participating in a networked community.
In each case, the input of the people who it’s intended to benefit is crucial – whether that input derives from our observations and investigations, from our discussions and brainstorming sessions with people, from the feedback they give us on our futuristic proposals, or whether, as in the case of open tools or networked communities, that input directly shapes the product or experience as it evolves through being used.
I hope I’ve been able to show you today how, by finding ways of allowing such products or experiences to be customized more and more closely to the needs of the individual, design can be a key success factor for businesses of all sorts.
Product policy and branding
I’d like to finish by saying a few words about product policy and branding, something that’s currently a hot topic at Philips.
Authenticity
The closer a company gets to individual consumers, the more those consumers begin to regard that company as a friend. And, as we all know from our own experience, we expect friends to be honest with us, to share our moral values and to behave in ways that are consistent with what they say.
That’s why it’s vital that the proposition the company makes to consumers is genuine and authentic, and that, in everything it does, the company acts in accordance with its stated principles and aspirations. In essence, in all its actions and interactions, the company creates an experience for the consumer, and this experience, like any other, must be all-embracing and thoroughly consistent. Of course, that’s the theory. The practice may be different, however. Companies, like people, can lose sight of themselves.
Psychosynthesis
The Italian psychiatrist Roberto Assagiolo developed a theory of psychosynthesis in which the personality is seen as made up of many sub-personalities, governed and kept in balance by the Self. According to this theory, we all have it in us to be courageous, ambitious, selfish, generous, lazy, industrious, caring, careless, and so on. Sometimes, one of these qualities or sub-personalities will dominate our behaviour, at other times, another will dominate, depending on the circumstances we’re in. We know somehow deep inside us how we would like to behave in any given situation. It is, in Assagioli’s view, the Self that tells us this; our ethical core, if you like; our ideals. When we’re behaving as the Self wishes us to behave, we’re “in balance”; all the sub-personalities are synthesised into a balanced whole. At other times, when we behave in a way that’s against our better nature, the Self has essentially lost control, and needs to get it back.
Philips – regaining balance
I suggest companies or brands can be seen in the same way. Philips, for example, began by making light bulbs. From making people’s lives easier and more enriched by providing easy and immediate lighting, the company then turned to making lives easier and richer in other ways – through radio and later television, household appliances, shavers, X-ray equipment, and so on. Always applying the latest technologies to serve this goal.
But somewhere along the way, together with other electronics companies and consumers themselves, it fell in love with technology and lost sight of what it was actually trying to do with it. More and more features were added to appliances. The more knobs, dials, and flashing lights a product had the better, until the living room began to look like the control deck of the Starship Enterprise! And the ultimate result of all this was, as we all know, the unprogrammable VCR.
Let’s make things better
For some time now, Philips has been working to get back to its original ideals and goals. For the past decade or so, we’ve had the tagline Let’s make things better – in other words, let’s improve the quality of people’s lives. It was a re-statement of our original motivation: to make people’s lives easier. And it added the intention to do this together with people, listening to them, and involving them as far as possible.
Sense and Simplicity
Now, as you may know, we’ve just introduced a new tagline or brand promise: Sense and Simplicity. This expresses more specifically what we mean by making things better – making things that make sense within people’s lives, things that help them, in relevant and meaningful ways, to get more out of life. And… to make those things as easy to use as possible, making life simpler rather than more complicated.
If we can keep this brand promise to consumers – and I’m convinced we can – we’ll be finally getting back in line with our original Self, the ideals and vision of Gerard and Anton Philips, the company’s founders.
Touchstone
Values like these give us, as designers, a touchstone to help us produce any brand expressions that are consistent and authentically reflect those values. This applies at all levels, from decisions on product features and form language, to packaging, advertising and displays – everything, in fact, that brings the brand into contact with the consumer.
By way of conclusion, let me give you just one example of how Design has helped recapture this focus at Philips, with a product that is both highly sensible and relevant to people’s lives and very simple to use.
HeartStart
HeartStart is an on-site defibrillator that’s so easy to use that, with minimal training, people can potentially save the life of a fellow employee, a friend, or anyone else who has a sudden cardiac arrest. It’s small and light, so that it can be easily carried to the patient’s side. The interface is extremely simple. Using natural voice instructions, the device guides you through each step of defibrillation and reanimation. Integrated pads placed on the patient’s bare skin transmit information to the defibrillator, which senses and adapts to your actions at every step. If reanimation is needed, it guides you through that too. It even reminds you to call an ambulance. And when the paramedics arrive, they can just press a button and it will tell them what has already been done. And between uses, it tests itself regularly, and warns you if any part needs attention.
Design – Key factor for success
I think you’ll agree, knowing that one of these products is close at hand and that anyone could use it would be a very comforting thought. It has won a number of prestigious awards. It is, I suggest, a good example of how design – in the broad sense – can contribute significantly to helping a company keep its brand promise, and bridge the gap between its technological and product-oriented competences on the one hand and the needs and desires of the many different consumers around the world on the other. And given that, I think it’s not too much to claim for design that it is indeed a key factor for success.
Thank you.
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