You Don’t Need a Design Agency
by Gerry Laster, Agile Product Management Consultant to the Humans
You don’t need a strategy for driving innovation, you don’t need a design agency, you don’t, you seriously don’t need a digital transformation, and please save your money and avoid that agile transformation.
There are three drivers to extraordinary success: Design (innovation), Operational Excellence (cost and quality of the product or service) and Performance (sell fast enough horses, but no faster than needed).
The truth is that there are companies that succeed by focusing on one or two of these categories. Lenovo continues to drive strong operational results and enormous shareholder value and yet they have made barely any changes to their workhorse, the ThinkPad, since they bought it from IBM more than a decade ago. Very little design and innovation and strong focus on product performance, and they pay a 5% dividend yield. The key to success seems to be avoiding innovation.
Motorola made a name for themselves by designing one of the most advanced and beautiful flip-phones in the market. They were famous for creating Six Sigma and focusing strongly on quality and performance. Like Lenovo they were amazingly successful at incremental innovation, and yet they weren’t able to recover from the smart phone revolution. Quality is obviously a company killer.
Startups are by definition “designful” companies. We admire them for their rapid innovation and for creating markets out of thin air. Many mature companies crave behaving like as startup, they spend millions in trying to emulate that startupy je ne sais quoi. And yet over 50% of them will have failed within 5 years and 70% won’t make it to their 10-year anniversary. Innovation is a worse company killer than quality!
If we take a look at the highest revenue companies in the US, the list is a yawn. Walmart, Exxon Mobile, Berkshire Hathaway they all rank above Apple, and Amazon ranks below CVS Health. Do you need more proof that design and innovation are overrated and the last thing you need is a design agency?
On the other hand, you may argue Amazon poses an existential treat to Walmart and with revenue growth of around 40%, ten times that of Walmart, is posed to overtake Walmart’s in a few years. Apple, although growing at “only” 14% doubles the growth of Berkshire Hathaway and more than triples that of Exxon. And this is revenue, not the more fanciful and flimsy valuation.
What Apple and Amazon have in common is that they are great at executing on the three key drivers: Innovation, Operational Excellence and Performance.
Most agencies will sell you one of these and leave you with a beautiful product that you can’t deliver and doesn’t work. Or they make you very agile and nimble at creating products that don’t deliver value, or they may help you get amazing at delivering products that will put you out of business within few years.
You don’t need a design agency. You need a Group Of Humans who can look at your company holistically and partner with you and your team across functions.
Agencies and consultancies have tried to put their arms around this opportunity. They continue to fail because their cultures and business models are built around one set of deliverables. Viewing all the elements of a company that contribute to great design, operations and performance as intimately connected, and solving for them in one go requires a completely fluid approach to talent. This is something that can only be achieved with the virtual network model. And it’s why Group Of Humans will no doubt be surrounded by formidable competition.
Bring it on. The result will be better businesses and better ideas to drive them.
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