Off-season: the predictable recession

A wintry January day in the beach resort of Scheveningen provided wonderful photographic material. But when looking back over the images an analogy between the off-season and recession started to form. In many ways seasonal businesses cannot survive without looking for opportunities to build or sustain the business in the off-season. They cannot afford to be idle, lay off employees and just ride out the inclement weather. They get creative, they build stronger customer relationships and brand loyalty. They prepare for the better weather that will assuredly come and invest in their assets and infrastructure, rebuilding or improving those critical business drivers that keeps the business thriving and the customers returning. They prepare for the on-season in the off-season, just as those in the throes of a recession need to prepare for the recovery. Businesses should take a leaf from the seasonal business entrepreneur's handbook and invest for their future in these difficult times.

The public sector and design

A number of luminaries in the design world attended the World Economic Forum in Davos this year to find, contrary to prior years, that design had taken a back seat (see Nussbaum) due largely to more pressing topics such as recession, reform of the global finance sector and Gaza. Understandable, but what did surprise them was the lack of interest in discussing innovative, transformational and/or forward looking responses to these issues.

Of course when a politician or public servant is faced with crises of this magnitude there is a tendency to revert to the "let's just get through this" approach – after all, the collapse of banking systems and economies is an all-consuming matter. The “design approach” is far more complicated, typically taking a "let's rethink and re-architect how we address these challenges" approach. The first response is band-aiding/quick-fixing the economy; the second is to look at what can be done to address current challenges while creating a foundation for future growth. Perhaps the first is necessary in the immediate term, but the second is essential for the longer term.

The design community's approach is, however, further challenged. While the public servant probably does recognize that innovation in public services is important for greater efficiencies, effectiveness and individual and community welfare and wellbeing, receptivity is low (right now) to this kind of terminology. There is much skepticism about "innovation" – it has been unfortunately over-used and abused. The fact that design was marginalized in Davos confirms that it is unlikely that it will be seen as a vehicle for substantive public sector change without putting it in a “relevant” context.

So how does one get government leaders beyond the “let's just get through this” approach? One probably needs to speak the language of the moment and get in their frames of reference. These times are about economy, society, financial meltdown, unemployment, shortages, etc. So the design community needs to talk about these challenges (and less about design methodologies, at least to start with). For example, what new “transformational” initiatives and approaches need to be taken to kick-start economic recovery and revitalize society? What can be done to ensure that the fixes that are implemented now will contribute to building a platform for growth and competitive advantage when the upturn comes? How can education, infrastructure, etc., be revitalized to contribute to and facilitate recovery? Answering these types of questions necessitates a discussion of the strategic enablers of economic success and societal well-being, and that, in turn, will necessitate a discussion of the role of innovation and design.

TED followed Davos, and a number of Davos attendees traveled to California for the event. Some commented that it was a far more forward looking, optimistic and celebratory event, wondering why the character of the events was so different and why the influencers (in Davos, the politicians; at TED, the innovators) held very different views. Perhaps the difference between Davos and TED was a divide between necessity (governments that have to muddle through the crisis, prevent further financial disaster and mitigate unemployment, etc .) and invention (the innovators and optimists who see beyond the present). The missing link in Davos was that there has been very little invention born of (or indeed in response to) the particular necessity(ies) being discussed.

The public sector/design divide is also exacerbated by a paucity of understanding of (transformation) design among public servants on the one hand, and a lack of communication of the (measurable) impact of design on public services by the design sector on the other. Innovation in and transformation of services, organizations and infrastructure is still a nascent (and negligible) segment of the design business - much more needs to be done to demonstrate its value to public authorities, governments, etc. Undoubtedly, transforming education, infrastructure, public services, etc., will be essential to growth and competitive advantage, and there is no doubt that design has a significant role to play.

For the moment, governments are focused on the bleeding out of their economies and don’t have an ear to lend. But the design sector has a big task ahead of it to make a credible case for itself. Advocates of its role in transforming the public sector are articulate but few. A much greater focus on this challenging and important design opportunity is needed, and indeed warranted considering the catalyzing role that design could have for economic growth and competitiveness.

Re-engage and redesign first

Yes, the inclination in hard times is to slash costs and headcount. However, this is counter-productive longer term as it does not provide for a springboard for success when the upturn comes. So how does a business ride out the storm and increase its opportunity for growth when fair weather returns? Before implementing drastic measures that could impact performance in the future, consider re-engaging and redesigning.

To re-engage means to getting back in touch with those that make or break the business: customers (retain them, above all), employees (empower them to bring about change), suppliers (reassure them), etc. Recession brings retrenchment and fear, so re-engaging with these communities is essential to business survival. To re-engage also means looking anew at the brand, positioning and how well the organization tells its story - see here for an interesting take on consumers and brands in a recession.

To redesign means to look anew at products and services, and at the systems and processes that allow for the functioning of the organization. Why? Because any organization, in good times or bad, should be seeking both greater efficiencies in terms of resource use, manufacturing processes, logistics, overall operational costs, etc., and greater levels of consumer centricity (user centered design) in the redesign of products or services. Its just good business sense.

So re-engage and redesign before knee-jerk cost cutting and headcount reductions. Reinforce relationships with those communities that are critical to business success. Find efficiencies across the organization that will not only lead to cost reductions but will put the business in better stead going forward. A recession can be an opportunity to build a more resilient and better-positioned organization for future growth. It was in the 1930s!

(Notice that the "I" word (innovation) was not used once. But, for an excellent read on innovating during the recession see here. )

Further reading on design and the recession: Design Council

"Attacking the recession"

In December, NESTA, the UK's National Endowment for Science, Technology and the Arts, released an important document entitled "Attacking the Recession" in which it proposed that the UK needs

a strategy to attack the recession, not just to respond to it. Innovation – in business, communities and public services – needs to be at the heart of that attack. The UK should aim to emerge as a more innovative, greener, more sustainable and diversified economy.

This document puts innovation squarely back in center court and helps dismiss the mutterings of the "innovation is dead" crowd. And it goes further, suggesting that innovation in other areas is equally important:

The biggest gains for society will be found in those sectors that both offer the most immediate growth potential, drawing on the UK’s existing strengths, and help meet long-term challenges: green energy, environmental services, biotechnology, and services for an ageing society.

As has been mentioned in earlier posts, rethinking and redesigning services and systems, from infrastructure to public services, is key not only to national economic recovery, but also to longer term economic advantage. Investment and innovation are building blocks of growth and competitiveness and are all the more critical in hard times.

Design, recession and Smart Consumption

On the Industrial Design group list in LinkedIn, the following question was asked "What products are people willing to buy in a crashing global economy?" The question prompted me to think about product design more generally. Given that we are in times characterized not only by credit scarcity but also resource scarcity, perhaps the issue is not so much what products will people buy in hard times, but rather what products should people expect and demand in times defined by scarcity? My answer to the above on the list was a little glib, but its applicability is more general:

Products that don't have sell-by dates, products that eschew built-in obsolescence, products that eschew built-in waste, products that are elegant (simple and precise, built for purpose), products that last beyond the first firmware update, products that are not disposable....

If we are in heading into new times, times characterized by moving from want to need as Bruce Nussbaum suggests, then as consumers we should demand and expect more of product manufacturers and service providers. Change can be mandated, but real sustaining change will have to be driven by empowered and savvy consumers and communities, embracing "Smart Consumption", that which encourages greater product and service effectiveness, efficiency (in terms of resource utilization, etc.) and longevity.