MEREDITH Strategy & Design

We design great places and spaces that advance the purposes and performance of work.
Our mission is to help companies and organizations of every scale
more effectively achieve their goals
and capture value from what they and their people do.

Jim at meredithstrategyanddesign dot com

(248) 238-8480

Filtering by Tag: business

Roger Martin on Design Thinking

There is a lot of skepticism around "design thinking" brought, I think, by process rigorists constraining movement forward and missing the significant benefits of even casual application of its principles and practices.

In any case, Roger Martin's voice is always excellent in connecting the shared purposes of business and design.

Tough choices – Who to save...GM or Detroit?

450px-RenCen

As GM prepares for a bankruptcy filing later this week, and as the region's business and political leaders gather at the anachoristic Grand Hotel on Mackinac Island for the annual regional Policy Conference, the subject of where the company's headquarters might be is high on the buzz list.

Moving its headquarters out of Detroit as part of the compression of its operations and realignment of its corporate real estate portfolio was out of the question until Fritz Henderson, the company's new CEO, said he'd look at all options as the company struggled for survival. The "all options" in this case referred to the concept, raised by the mayor of the suburban community where GM has its Technology Center, that GM should leave Detroit and consolidate in excess space in Warren.

The proposal clarifies that the options "are presented not to move jobs from Detroit to Warren, but to reduce GM's costs as a first important step to profitability and efficiency."

"I present this to you not as a choice between Detroit and Warren, but as a matter of GM moving forward and surviving," Fouts' letter states.

The concept produced a firestorm of criticism. But is it really a bad idea? If the focus is on the survival of GM, an essential economic engine in the region and the country, why is the welfare of the city of Detroit the defining agenda? Is the focus on the city as the primary determinant something that could affect the success of GM's reorganization and reorientation?

Ever since Mayor Coleman Young at the beginning of his administration in 1974 told the criminals in Detroit to "hit the other side of Eight Mile," there have been tensions and rivalries between the city and its suburbs. Mayor Fouts, of Warren, is only the latest in a long line of suburban municipal and county leaders who have, as some would say, cannibalized the city of Detroit by offering invitations and incentives for companies to relocate from the city.

The city itself seems to have been suicidal over the last generation, not only exclusionary to development interests, but also corrupt, antagonistic, and lately, disfunctional and absurd in its behaviors. Making the choice to come to the city is harder and harder to do and, I expect, the case to stay in Detroit for many companies and institutions is less rational than philanthropic.

778px-General_Motors_building_089833pv

GM's headquarters location, however, seems to be consistently linked to the life and health of the city. Its first, iconic, headquarters was built in the early 1920's in an area of Detroit eventually called the New Center. Grand Boulevard, a ring road that when constructed represented the outer limits of the city, became the location for the next wave in the progressive outward expansion of the city brought byu the success of the auto industry. GM became the catalysts for development of retail, entertainment, business, cultural and residential occupancies in the area.

Economic and social issues with seeds in earlier decades eventually grew into the 1960's. The New Center struggled to keep business occupancies, the surrounding neighborhoods began to decline, and the 1967 Detroit riots pretty much defined the end of the New Center. GM continued to support some aspects of renovation and redevelopment in the area, but it was clear that the location had lost its cache and GM's interest.

GM eventually moved to the Renaissance Center, along the riverfront and near the historic, "old center" of the city. Renaissance Center was a concept of Henry Ford II as Ford Motor Company's contribution to rejuvenate the flagging economic health of the city. The development was considered faulted from its beginning because it pulled the life from the streets and buildings in the center of the city, and surrounded itself with high concrete walls interpreted as a defensive perimeter from the citizens of a city not yet recovering from the impacts of the riots.

I was part of a team of planning and design consultants hired by GM in the early 1990's to realign the company's real estate and facilities portfolio with the cyclical reorganization and consolidation of the business beginning to take place. A central concept was to reduce GM's holdings and leases to a small number of "thematic" locations. The Technology Center in Warren, the Proving Grounds in Milford and the Truck Products Center in Pontiac, were among those locations, and GM Headquarters was, of course, another.

The GM Building was beginning to show its age, and its narrow fingers were not supportive to the emerging structure and operations of the company. It was expensive to maintain, and difficult to renovate while occupied. Concurrently, the Renaissance Center became available and, after an assessment of the appropriateness for its reorganized operations, GM purchased the complex in 1996 and began its renovation, including making the complex more open, better managed, easier to comprehend, and more engaged with the surrounding developments on the riverfront. GM was again celebrated for its role in the rejuvenation of the economic life of the city.

In recent months, GM has been actively buying out the employment of its white collar workers. The Renaissance Center headquarters of the company, as with other properties, is now only partially occupied. Further reduction in the size of the company and its markets will continue to have an impact on occupancy there.

So, what now?

GM's continued presence at this location is considered to be essential for the continued life of the city. It provides a real as well as psychological grounding for the economic and social life of the city, and even passively is an important basis for other development initiatives in the city. GM's commitment can give others considering moves to the city a confidence that there is continuity and strength there. The large numbers of people who would remain with GM or be other tenants in the building provide at least daytime economic life to the limited retail and service businesses in the city. And longer term planning, like the proposed light rail transit system, would depend on GM as an anchor to the system and the basis for the other economic life and transformational development it is intended to catalyze along its route. Without GM occupancy, I do not think the system has any relevance.

So GM is essential to the life of the city, but is the Renaissance Center essential to the life of GM? I am deeply concerned about the city that has been the base for my career and the basis for my lifestyle. But I am fascinated by the question of how place affects performance, and the question of Detroit or Warren is provocative. So here are some speculations and provocations, not positions, as a means to gather further information and sustain further analysis and planning.

The Renaissance Center is a drain on the resources and energies of the company at the most critical time in its history. And it doesn't really do all that much for the daily life of the city.

GM's diminished scale – brands, people, plants, market share, resources – cannot justify nor sustain a multi-site empire. It had already effectively abandoned millions of square feet developed in the 1990's for its Truck Products groups in Pontiac, just north of Detroit. The Milford Proving Grounds, a specialty campus, will certainly be underutilized in the new company. The Technical Center, a diverse campus for research, design and engineering, is underutilized and underdeveloped.

And Renaissance Center, where GM had been pusing other tenants out earlier in the decade, is now a swiss cheese of occupancy for a company not yet scaled or regorganized for its next generation. The complex is the transposition of a multi-tenant mixed use concept from another city and another economy. Peachtree Center in Atlanta was its model, and Portman's duplication of the concept in Detroit – bad design and bad planning and in the wrong location – may, other than through taxation, have harmed the city more than helped.

A complex of five silos with small floorplates and no interconnectedness except through public spaces and defensive security at its base, separates the functions and staff of the company, reduces its speed and efficiency, and cannot provide the environment for new thinking and new acting demanded by the urgency of the current condition.

And Renaissance Center is a self-contained complex. Despite the best efforts to open the place up in its recent renovations, the people in the complex do not mix with the city. Work, food, services, parking and entertainment are all there, and people who have worked in the complex for years still do not know the names of the streets within blocks of the headquarters. If the complex had been built inboard a few blocks, at Grand Circus Park, the city might have had a diverse and lively downtown; built across a ten lane boulevard from the rest of the downtown, the complex is a symbol of renaissance but not a catalyst for it.

saa_a

The Technical Center in Warren focuses the company on its purpose – its products. It is itself a great symbol of leading design and engineering, and can catalyze energy, focus and achievement by linking the administration and management of the company with its product vision and quality.

The GM Technical Center, designed principally in the 60's by Eero Saarinen remains an iconic and inspiring complex. As a campus of dedicated buildings, it clarifies and articulates the functions and purposes of the company – research, design, engineering, integration, fabrication, supply chain management – and the differentiating components of its products – styling, powertrain and technology. Locating the headquarters here would not only make the company more efficient, but provide a symbolic and physical environment for its renaissance.

Underutilized but recent buildings, originally planned for engineering teams, have light-filled, large, open floorplates that could change the insular culture sustained at the Renaissance Center, creating integrated and efficient teams connected and visible to each other and united around common and shared purpose.

I have worked on a number of studies for renovation, redevelopment and new development at the Technical Center, and know it can sustain the life of a smaller company, but also its expansion in future success.

So, which is more important? To make a probably interim, potentially ineffective, politically-motivated commitment to the Renaissance Center? Or to make a catalytic, transformational, refocused, repurposed company that can contribute in its rebirth to new economic development in the region?

What are your thoughts?

This just in –

Granholm, Bing fight to keep GM in Detroit's Renaissance Center

Warren offers tax breaks to lure HQ to Tech Center

Powered by Bleezer

10 more ways to jump-start the auto business

600-muscle I have only done a very quick scan of the article, "25 Ways to Jump-Start the Auto Business," in a recent Fast Company issue. But I am impressed by the fact that out of the 60 people in or close to the industry who were asked to contribute ideas only one, it seems, looked to the intersection between design/production and consumer/consumption.

Even though the experience of buying and selling cars has already changed radically in the Internet age, the lingering stench of going to the dealer remains and many experts see room for improvement. "We need to allow manufacturers to sell cars over the Internet," says Jack Gillis, author of The Car Book. "Linking the purchase process to 'just-in-time production' will start to remove the tremendous inefficiencies in the distribution channel and increase their ability to estimate demand." And it might also make buying a car, dare we say it, fun.

I have been critical, as many, about the American component of the industry, but I also believe that a key issue is that most people cannot break through paradigms about design and quality that are, in reality, a decade out of date. The financial crisis also obscures the fact that there are great products being generated that are getting the right kind of attention from a younger generation of potential buyers. What's missing is not so much a remake of the designs, not so much the quality, not so much the industry itself, but a lot about the interface between these companies and their customers. Almost everywhere else in our world, people are paying close attention to the interface between production and purchase. There is a heightened focus on customer service, the retail experience, and brand protection.

If we look at what others are doing, we might get a few clues about what to do here, as well. Some of these might be-

1. Stop screaming-We are not motivated by the screaming ads placed by local dealership groups. This is such a predominant style of communication that it affects our perception of the quality of your products and of the entire industry.

2. I'm an American, but not that kind of American…why do you make us resist buying that truck we want for the work it will do for us?-It's about utility, isn't it; not about patriotism and living in the country and dominating everybody around us. And stop screaming.

3. Why do you think we do all of our research on the Internet instead of in your dealership?-You know the statistics. We avoid you like the plague and make all of our selection decisions before walking into the dealership, where, again, the only thing that matters is the deal. Isn't there some value to you in making our relationship more robust, more complete, longer lasting, mutually interesting?

4. It looks like your web sites are intended to be a starting place for our relationship; you should design them to do that-We want simplicity, clarity, efficiency and speed. And a follow-up when you say that you will. And why not give is the same or better information we can get through 3rd party sources-We get specs, prices, availability from other sites, and you know we do, so why not offer it to us yourself? We might like you, and trust you, more.

5. We're really interested in the product, can we suspend the deal for a few minutes?-Money matters a lot to all of us these days, but transforming your company and your industry means we should first be interested in wanting to know more about you and your products and services. But we can't see through the deal clutter.

6. We am going to spend a much longer time with this vehicle-It looks as though everything from the economy to manufactured quality will mean that this vehicle is in our garage for a few years. How will you make us interested in what you have to offer over that time? How will you design the experience to make our extended relationship mutually valuable?

7. Redesign the sales process to become a respectful buying experience and an expression of an interest in a long-term relationship-Clean up your desk; this transaction is about us, not about you. Redesign the finance and insurance process; get rid of 75% of those forms most of which look like 25th generation Xeroxes. Get the sales manager to give you some authority to conclude the deal yourself. We'd like to walk out feeling pride in our purchase, whole after the transaction, and interested in coming back for the updates.

8. Think through the design of your store to promote the quality and value of your product-If your product is so great, of such quality, then become a member of the community. Plan your site to not be a blight. Give us a great experience driving by, and driving in. We might then leave your license plate frame on.

9. Really great brands connect the retail experience and the product experience-It seems you are trying to say, "Look! Look! Look at me!!!" Try designs that invite us to explore what you sell.

10. Partner with or influence others in the community who have something to do with the auto, too-We wonder what might happen if the makers and sellers of cars, realizing that the older sense of the car being part of the culture was valuable, would work together with the entire services chain to make ownership and use a delight. Start with gas stations, for example-why do these things have to be blindingly lighted, for example, so the only thing we see as we drive by is an under-canopy array of ugly bare light fixtures. It's called light pollution and we believe it decreases the property values and security in my community. Think about your product in a broader cultural context.

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to FurlAdd to Newsvine

Making working visible

making-work-visible_1791_002 There are at least two levels of invisibility in my town, two layers of its cross-section where you have to struggle to find signs of life. There is an upper layer-the anonymous and blank windows of the high rise office towers-and a lower layer-empty retail shops and lobbies reflecting the level of occupancy of the floors rising above them.

Colleagues are now in the midst of the periodic ritual of designing infills for empty storefronts in the CBD. The first of these that I remember occurred back in the early eighties. It was a joint venture sponsored by the local architectural professionals and the local artists market. Reasonable successful as a promotional event, artists filled up empty shop windows in the shadows of the GM headquarters, where Saks Fifth Avenue had long served the city and finally pulled up for the suburbs. Their works seemed delightfully in the right place, numbered for reference in the weeks-long auction that took place while they were on view.

In an interim attempt to clean up the city for some event that might draw visitors here from other places, the city commissioned decals for the upper windows of many of the downtown buildings to attempt to convey a sense of life and occupation in the ever declining city. Scenes of curtained windows and table top lamps to be viewed by the "people mover" that cruised the unpopulated city at the second and third floor levels, the program was met with more derision than appreciation, and caused more attention to the reality that it attempted to mask.

More recently, when the Superbowl came to town a couple of years ago, the local architects and contractors teamed up under the auspices of the downtown business association to fill up shopfronts with some form of creative construction. Some baldly promotional and off-purpose, and others only half-heartedly committed, they were left to decay shortly after the event and, as the earlier attempts, contributed to the sense of abandonment.

Another initiative is now in the works. As I watch colleagues prepare their submission, I have too much memory of the past to become enthusiastic and supportive of the present, already seeing the future.

But their work got me thinking. I propose an inversion of the city's cross section, or at least a partial inversion. I want to make work-that is, working- visible. What is up should come down, what is down should become real.

The abandonment of storefronts in the city is caused by the fact that the offices above them are so lightly occupied that the market for the amount of retail space in the city is unsustainable. Preservation of these spaces as "storefronts" under a fantasy of retail restoration only perpetuates, maybe accelerates, decay.

Upstairs, invisible to the world, are the remnants of corporations, professional firms, and others who have maintained their place in the city. Who they are and what they do and how they contribute and why they are here-is invisible. These are lonely places. Nobody shares an elevator with you. Walking the halls stirs uneasiness, wondering who else might be there who should not be there and wondering why you are. We squeeze in under low ceilings and look out of small windows from ever-shrinking space.

I want to move downstairs. I want to be in expansive spaces with high ceilings. I want to be in light filled spaces where high windows bring sunlight deep into the interior. I want to have a reason to put what I do prominently on display. I want to look out and see people, maybe even greet people, rather than look across to an unoccupied building across the way, or down to the streams of people leaving the city.

So, I propose that landlords reconsider the use of their buildings, that brokers reconsider how they promote space and to whom, and I propose that everybody left upstairs goes downstairs. There just might be enough of us to fill up the ground level of all of our buildings. And if we did we'd have a city that is alive. We would see who is here. We would see the work we all do. We would get to know each other better and probably collaborate with each other more frequently. We'd build energy from our own activity and reinforced by the visible activity of others.

The upper floors of our buildings would remain anonymous and invisible and, for the moment, irrelevant. But the ground floors would be lighted, active, visible, productive, energizing, and more than sustainable.

3/24/9 This just in

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to FurlAdd to Newsvine

Five considerations for the places and spaces of the square-shaped organization

02_28_10 I’ve become increasingly interested in the spatial implications of what I’ve been calling the “square shaped organization.” But before getting to space, let me explain this term.

We have for so long tended to think of the classical modern organization as triangular or pyramidal in form. That is, we see them shaped by a relatively small leadership group at the top of the organization, a proportionally larger middle management rank, and employees in various staff roles forming a large base. This organizational design is now more typical of command-and-control enterprises.

Professional and creative services organizations have traditionally and typically had more of a diamond shape. That is, there is still a relatively small leadership composed of partners in the organization, a broad middle band of associated professionals, but then a relatively small number of support staff.

The spatial and formal footprints of each of these organizations have also been different. The pyramidal organization, usually large and spread across many properties in a portfolio, typically centers in a headquarters building and, most classically, this is a high rise. The corporate officers are on the top floors, the middle management fills in the tower, and the staff is mostly out at regional or manufacturing sites. In the more enlightened of these organizations, management ranks have been typified by the higher levels of middle managers getting offices in the interior of the plan, and the others in this processing and production group organized in hierarchically assigned space in an open plan “cube farm.”

Most of the professional firms have also liked the high rise form for their offices. Although smaller in scale and filling only a few floors of the tower, these firms have nonetheless organized hierarchically. Power is reflected in the assignment of corner and perimeter offices as in the form of the top ranks of the pyramid organization. Associates also get offices, but in many cases, these are located to the interior and with the distinction of not having views and natural light. Support staff and support functions fill in the great middle ground of the floor plan.

But this organizational form is changing. Over the past few months there have been stories about layoffs in law firms, architectural firms, advertising agencies and other similar organizations appearing almost every day of the week. Reading into these reports, it is surprising to see how single layered most of these reductions are. That is, the “associate” ranks seem to be the place of the largest portion of change.

With neither a clear command structure nor a significantly measurable support staff, the organization appears flat and non-hierarchical—they’ve become “square shaped.”

Combined with the adoption of more flexible workstyles enabled by technology, places and spaces that have characterized these organizations no longer make much sense. So what are the implications for space planning for square-shaped organizations? I’d offer these:

It’s now about how things get done, not about who does them Well, before getting to that, who does what is certainly much more important in this new organizational form. The thinness of the organization in most cases means that specialists now compose the firm. But the resources available to them to do stuff are now much more limited. The isolation of practice areas, the dedication of administrative support to individuals or small groups, the accessibility of support, and other characteristics of the recent past are no longer sustainable. To get things done, I believe these organizations need to become much more transparent, that is, much more visually connected.

Design for collaboration, not for direction The new composition of the organization means that older modes of production no longer apply. Just as office technology has put more productivity and in the hands of the professional, the thinning of the ranks of the middle ground in these firms also pushes more production responsibility “upward.” Counterintuitively, this also seems to be making work more diverse. Specialization of knowledge and reduction in production support means that work looks different now. In addition to focused work and production, the professional is increasingly engaging, motivating, and innovating with peers. Effective and productive work now includes socialization, collaboration, mentoring and learning, and these activities need appropriate places and spaces to be effective.

It’s now about place, not about power That is, it’s a good idea to reconsider place-making. In a firm, a community, of peers, and with the need to support more diverse workmodes, not only does work look different now, but place can (must?), too. The expressive vocabulary of the workplace is no longer binary, open or closed. The need to communicate, coordinate and collaborate breaks down walls. The office begins to look more like a city, a community of practice, where the articulation of what you do and how you do it shapes the look and feel of where you do what you do.

Express activities and rituals This is a long overlooked opportunity that I think now has greater relevance in the new organizational form. There will be a set of rituals, a cadence of events, that comes to define what differentiates the organization and supports how things get done. The places where these take place now are found by labels on doors—“conference room”—in otherwise undifferentiated space. The activities of the evolving place are about actions—collaborating, integrating, innovating—and not about hierarchy or formal processes. The right spaces for these activities may call for, or certainly accommodate, new forms and expressions. They can be as distinctive as churches, schools and factories in the urban landscape.

It’s a great opportunity to become a brand The design of these firms in the past has been about style, not about substance. That is, the organizational form was so consistent across these professions, that the formal vocabulary used in planning them became common. What differentiated one from the other was essentially the name on the reception walls and the materials used in the office halls. This new form, however—of specialization, collaboration, ritual, and differential place-making—offers the opportunity to professional services firms, and other organizations evolving to look like them, to be read as distinct brands. Whoever walks into these places will see what is different, and walk away with a visual impression that reinforces the unmistakable differences between them.

If there is this opportunity for a shift in the planning and design vocabulary for the evolving square-shaped organization, and if the firms of this new generation take advantage of this opportunity to see the world as fundamentally different, then other things also begin to evolve and change as well. The office building of today becomes obsolete. Where we choose to do work is less centered. Standards are not. Real estate shifts significantly. But more on this later.

square-shaped_1791_001

A postscript--

Just found this discussion today in Harvard Publishing's HBR Editor's Blog. It seems to be an interesting affirmation of the underlying shift in values and perceptions that might inform this shift in planning I address above.

What will help corporations survive? Here is Handy's prescription:

"....what enables a corporation to succeed in the longer term is a wish for immortality, or at least a long life; a consistent set of values based on an awareness of the organization's own identity; a willingness to change; and a passionate concern for developing the capability and self-confidence of its core inhabitants, whom the company values more than its physical assets. I suggest that those conditions are best met when organizations live up to the literal meaning of the word company--"the sharing of bread"--and regard themselves as communities, not property.....in time, the laws governing corporations will change to reflect (this) new reality." ("Looking Ahead," HBR September 1997)

So what does the future of the organization look like? In one of his very first books, Gods of Management: the Changing World of Organizations, Handy advanced the idea that the best organization operates most like a village--a place where people equally contribute their skills for the good of the whole, where culture matters most, where the initiative is bottom-up, where the shareholders are the people who do the work. "Villages are small and personal, and their inhabitants have names, characters and personalities," he wrote. "What more appropriate concept on which to base our institutions of the future than on the ancient organizational social unit whose flexibility and strength sustained human society through millennia?"

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to FurlAdd to Newsvine

5 key factors guiding workplace investment for a faster, more robust recovery

One of the most prevalent concepts in industrial and corporate management is the concept of “lean” production. After carefully analyzing processes, leading manufacturers and producers find ways to eliminate barriers, increase efficiency, reduce waste and the cost of waste, improve the quality of jobs and the performance of people, and generate products that provide greater satisfaction and value. In this time of great anxiety about the direction of the economy and the search for places to cut costs and make meaningful investment, I am surprised by what seems to be a persistent failure to understand lean principles in knowledge work. Working with some of the largest manufactures, product marketers, and industrial designers, I am amazed by the persistent application of workplace planning standards that have lost relevance, and the refusal to consider investment in approaches that have been proven to deliver higher productivity—that is, engagement, purpose, commitment, satisfaction, innovation and effectiveness.

I understand the resistance to spend. The notion that a more desirable workplace could yield profitable activity is immediately rejected by facilities personnel and project managers whose sole measure these days is (apparent) cost reduction. I believe, however, that this approach, in many cases, actually embeds persistent cost in the organization’s operations and causes repetitive “right-sizing”—the elimination from the portfolio of the knowledge resources that, more appropriately engaged, would yield leadership in the market and in profitability.

I am generally confident that—

  • Most people don’t require more than about 30 square feet to perform 80% of their tasks efficiently—but corporate facilities standards persistently give them 2 to 10 times that amount of space
  • A high partition surrounding an individual means that individual is not effectively engaged in the purpose and work of the company—if I can’t visually connect with you, waste persists; if your behaviors in the openness interrupt me, you are in the wrong place for what you are doing
  • Most valuable work of leading organizations takes place out of the office or cubicle—in my own case, I’ve come to believe that every hour I spend in my office is more than two hours of lost value to my company
  • As a corollary, our research shows that individual workspaces are unoccupied 40% to 60% of the day—let’s see…$X per square foot times the workstation standard allocation times 50% effectiveness times how many employees time an effectiveness quotient equals how many dollars in lost space productivity?
  • If the only spaces in your organization are labeled “office” and “workstation” and “conference room” you are losing ground in your market—these are about separation and formality in a world that is moved by informality, connectivity, and speed
  • If your people are more connected outside of work than in work, you ought to question your management, planning and technology policies—I learn from my colleagues, and then use what I learn to the value of my client and the position of my company

I think that these things matter, measurably—

  1. Work looks different, now—and so must the workplace
  2. Openness generates profits—opacity is a sign of fraud
  3. Socialization yields the majority of corporate innovation
  4. Focus is a selective activity—collaboration is the dominant activity
  5. Training is a waste—the casual mentoring conversation is where value is created

In all of this, a lighter (leaner) workplace may be the most effective tool to an accelerated recovery and a sustainable leadership. Strip your workplace of weight and rise up the charts.

More later.

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to FurlAdd to Newsvine

10 emerging considerations to shape the design of the next generation of automotive retailing

autos_0906_32googlemobile06 I currently have the opportunity of working with one of the major automotive manufacturers to define the next generation of their retail dealerships. We have been anticipating their challenge for a while.

Not only is the automotive retail model a bit stale to begin with, but the emerging economic conditions have certainly changed everything in their domain. Whether by plan or by attrition, there certainly will be many fewer dealerships out there. The product portfolio of every manufacturer is getting smaller. Investment in events, advertising and marketing is shrinking, and even the major North American auto shows were much smaller in content and attendance this year.

Our charge is to accept that these symptoms are, in fact, the new fundamentals of the marketplace, and that the dealership of the future must have a significantly smaller footprint. This original mission, borne of current circumstance, pressure or opportunity, seems tactical compared to the potential richness that we see in the long turn of subject. I feel comfortable however that as the conversation continues we will all find a way to broaden our perspective and lengthen our view.

I am looking ahead like this because I am fascinated and interested in the tangential and circumstantial influences that appear even before my research begins.

A couple of examples that have appeared in random readings over the past couple of days—

  • “Plan B” is the expression that many of us have used to describe a fallback position when the primary goal becomes unattainable. In a nice exploration of the impact of the economy on these alternative dreams in the New York Times today, David Segal quotes a Miami real estate investor. “I got rid of everything luxurious,” he says. “I drive a Ford pickup truck. I used to drive a BMW 5 Series, and I was going to upgrade from there, to the 6 Series convertible.”
  • Ben Terrett, in his blog, Noisy Decent Graphics, admits to hating cars. But he is tuned to an awareness of how media might affect purchasing decisions. He’s announced a project, he calls “the long car purchase.” He describes his plan like this—“So under The Long Car Purchase I'm going to note down all the significant interactions I have with car advertising and branding over four years (or whatever) and then maybe we'll see a picture build up of how that affects my purchase. Maybe we won't. It's an experiment.”
  • The google-izing of the industry seems to be a frequent evocation for exploration of new models for the business. Jeff Jarvis challenged the industry in an article in the new issue of Business Week. He offers the Goggle design process as a remedy for the disconnect between Detroit and drivers and suggests a radical redesign for the business. Rita McGrath took up the subject in her Harvard Business blog, but then her colleague, Bill Taylor, suggested she and Jarvis both ought to look elsewhere.

This is a very small but, I’d say, typical sample. They are mostly about the products themselves, but what implications might these random readings have on the design of the dealership and the retail business?

For the moment, I make the assumption that the current, emerging and enduring economic conditions generate these conditions—

  • Buying a car is going to take more time
  • Car manufacturers will bend to greater consideration of the customer (choice) than the car (production)
  • The retail business must become more pull than push

Here, then, are ten emerging considerations for a new business model, ten considerations that can shape a program for a new kind of dealership design.

  1. Build a new cache around products that did not have charm before. How can I arrive at this event in a Ford pickup and not lose the attention and associated credibility I did when I arrived in a BMW 6? Manufacturer’s ads, local dealer’s ads, and the dealer’s sales people all contribute to the success of brand transitions.
  2. Become a place of learning rather than a place of selling. The emerging electric and hybrid technologies are unfamiliar. There’s a lot of lore out there about sustainability, environmentalism, fuel consumption and emissions, cost of ownership, etc. The last place many people would think to look for credible information and instruction is the dealership. How does this transformation from creepiness to credibility take place?
  3. Make it a ceremony not a transaction. Delivery is a nominal process, mostly. It may have achieved its height in those fantasy Saturn commercials, where the hand-off of the keys was an emotional event. Ceremony and ritual imply shared values, time, community, culture and other factors not currently expressed in, say, the Toyotathon.
  4. Accommodate personalizing, resist packaging. Dealership economics as well as production efficiencies have meant that we’ve had to take what someone else imagined for us rather than what we wanted or needed. Each of the articles I cited above imply a significant devaluation of what you chose for me and a real value associated with what I can make for myself.
  5. Utility is the new luxury. Satisfaction of what I need and what I need to get done feels really rich right now. More than that is corrupt.
  6. Eliminate the lot. The car lot has never been a good experience, and ought to be abolished. It is a huge burden on the dealer’s business, is an environmental nightmare and community blight, and is irrelevant when time is on my side. I remember a phrase from sitting in a demo vehicle with my Dad when I was a kid—“We’ll build your car and it will be delivered in six weeks.” I want my next car from the factory and built for me, not from the lot. You, dealer, should be happy.
  7. Sell experiences not products, but experiences beyond the product. In the convention of asking what business are we really in, the car becomes defined as a vessel of navigation, entertainment, business, and socialization as well as carrying the associations (performance, sex, utility) that have defined brands for ages. Ignoring for a moment the threats associated with on-board technologies, the fact of the matter is that while moving from place to place, the car is place—living room, game room, office—and contains all of the experience associated with its extended functionality.
  8. Consider the implications of conditional ownership. As the world urbanizes, more will have the options that allow Ben Terrett to hate, or not have, a car. Hyundai, in these ugly times, even offers a conditional ownership model—lose your job and we’ll take back your car. ZipCar, and others, offer a model that looks like rentals, but feels different. Should conventional ownership stand outside of this model. Can I come in for an update to my technology, for example? Who will do this—the dealership or the technology brand?
  9. Consider the implications of a multi-point relationship. Remember those relatively silly secondary branded vehicles—the Eddie Bauer Edition? Remember the building expectations for “Intel Inside” for cars? As a car is embedded with utilities for navigation, communication, entertainment, safety, comfort and other user-defined attributes, realize that others may make or shape the brand image and the associated relationship experience.
  10. It’s not about you, it’s about the embedded brands. Jarvis complains about the radio and Tarrett seeks an audio satisfaction, while iPhone delivers communication, entertainment, socialization, connection, information and so very much more. The iPhone advertises content and utility—“need a cab in an unfamiliar city?”—not the iPhone itself. What are the experiential utilities in the cars you are selling?

I am sure we’ll return to these and other subjects as our conversation continues. In the meantime, what are you looking for?

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to FurlAdd to Newsvine