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PARADOX Start

Franz Liebl

DO PLACEBO PRODUCTS DREAM OF ELECTRIC SHEEP?

APPROACHING "STRATEGIC DESIGN"

by Franz Liebl

Everybody Is A Designer?

Dabbling with design as an interested outsider almost inevitably provides a feeling of paradox. After contemplating at length everything seems to be design. This is especially prominent if looking at the often-quoted field of web-design, which can mean (depending on the point of view) the underlying business model, organisation of data, the functionality (of the website), usability of the surface or its graphic outfit (Lovink/Liebl, 2001). One fact does show itself clearly: Design refers to everything that can be designed, or ­ in terms of decision-oriented business economics ­ it refers to everything that can be decided. Thus business economics has known terms and concepts ­ apart from "corporate design" ­ such as "business-design" (Keen 1991), "organisational design" (Nystrom/Starbuck 1981), "work design" (Oldham/Hackman 1980), as well as last but not least a tradition of researching strategies which are called "design school" by Henry Mintzberg (1990).

Business economics is also ingenious where quasi-invisible products are concerned. Where physically perceptible products do not exist, special staging efforts are needed to bring about an appropriate experience resp. adventure for customers. An up-to-date "service-design" therefore has to produce points of contact with customers using an appropriate "process-design" (Chase/Dasu 2001). Process-design also becomes important at a point where it is a matter of communicating product features that, even though they are not directly perceptible, serve as a differentiating feature (e. g. ecologically or politically correct ways of production), or where creating special emotions within the scope of a "label-world" is concerned. That includes singling out the design process as a central theme and integrating it into the world of products or labels via "storytelling" (Liebl 2000a; Liebl/Rughase 2002). In accordance with the tabasco®-effect (Götz 1999) one could term this form of agenda-setting a design-design.

The subject we are concerned with here obeys what Eugen Leitherer formulated years ago at the opening event of the Design-Zentrum München as an innuendo to the motto of the there-located "Neue Sammlung" as follows: "Design ist keine 'Kunst, die sich nützlich macht'; Design ist eine betriebswirtschaftliche Funktion." ("Design is not an 'art, which makes itself useful'; design is a business function."). And it is, one must add today, a ubiquitous function. For where everything is recognized as being designable, everything is finally perceived resp. interpreted as designing (-decision, -effort) (Schulze 1992). Thus design became, as far as business economics is concerned, a kind of universal "cultural metaphor" (Gannon 2001, see also Balkin 1998), which has largely lost its analytic power. Evidently ways have to be found which differ from contemplating the various "dash-designs" with their predominantly functional-operative aspects, if one wants to approach the foundations and targets of design.

Intermezzo: OperationsResearch and Design

Is the business perspective consequently not helpful in eliciting the basics of design? Yes, it is. The discussion on conceptual and theoretical foundations of design is reminiscent of the discussion on the foundations of Operations Research that has been going on for many years now. The discourse about the question "What is Operations Research and to which end is it pursued?" is to a large extent similar to the situation mentioned above. This is hardly surprising, as Operations Research is seen as the discipline that concerns itself with the design of decisions and problem solving in man-machine-systems (e.g. Hanssmann 1993; Ackoff/Gupta/Minas 1962). What started out as Systems Research quickly became to understand itself as Systems Design. Since 1974 already, Ackoff spoke of "Redesigning the Future" (1974) or the "Idealized Design" (1981) of companies and other large-scale systems and a high level of complexity. With that the idea of dissecting systems into components which have to be analysed abdicated, and the concept of a synthesising overall draft that understands system as subservient to its surrounding systems came to the fore. Quoting Ackoff (1997): "The first fundamental principle of systems thinking is that management should be directed at the interactions of parts and not the actions of parts taken separately." Just how close the relationship between Operations Research and design really is can not only be discerned through cursory reading of Dieter Rams' (2001) statement "After all it shall solve problems", but it can also be seen in a comparison of Ackoff's synthetical planning process from "Creating the Corporate Future" (1981) and Owen's (1998) "Structured Planning Process" of product development in which metaplanning, planning, and designing are interwoven. Apart from the conspicuous isomorphisms it becomes clear that both authors draw away from operative questions and connect design with the strategical level.

In this way a new starting point for the foundation of design presents itself to us. Perhaps we can come to know more about the basics of design if we look at it from the strategic perspective ­ in other words: If we ask the question about "Strategic Design". To this end we utilise ­ in the face of the manifold cross connections between Operations Research and design ­ firstly the findings from the area of "Strategic OR". So what does Strategic OR mean? That is a question, which arose only a few years ago in the discourse about Operations Research. Two branches can be identified, an instrumental and a process oriented one. These shall be explained below.

The instrumental access

The first, instrumental, perception asks for the results. Therefore one speaks about Strategic OR, if a company is enabled to obtain a lasting competitive edge, i.e. economic or differentiation advantages (Bell 1999), by using quantitative procedures of Operations Research. However, there are not many proven examples for this correlation. Airlines, who achieve profit-optimal capacity utilization of their aircrafts by quantitative optimisations in pricing (Yield-Management), are often called on as examples. Generally it seems to be somewhat paradoxical that it should be possible for companies to establish a lasting differentiation power in competition by optimising their operative efficiency ­ and indeed this fact is massively questioned by Porter (1996).

Analogous to the above, "Strategic Design" would mean achieving economic or differentiation advantages by utilising design. Both seem to be plausible. Especially concerning the cost, it was recognized in the late 80's in the discussion about Simultaneous Engineering and Target Costing in R & D that about 80 % of the final production cost of a product is determined in the design and construction phase already. (Glück 1995, Bergauer 1994). The differentiating effect that stems from better functionality and better looks is supported less well resp. less systematically through empirical studies, even though it is supported by numerous anecdotic evidences and intuitive plausibility. But the analogous conclusion can be drawn: If this instrumental understanding of strategic design is applied, the competitive advantage is not a lasting one, since the knowledge about developing and construction processes ­ according to experience ­ diffuses quickly; likewise, the elements of the exterior design are easy to copy, as is for instance shown by the example of translucent plastic materials in the segment of personal computers.

The procedural access

The second (procedural) view of strategic OR thus seems to be more conclusive. It primarily asks for the role resp. contribution Operations Research can perform resp. make in the process of strategy development. In the area of Operations Research, it is especially Soft OR that comes to wear here, as it can help to represent and analyse strategic issues and how the people involved view them by methods of problem structuring. By representing an issue - a problem, a dispute ­ as a personal construct resp. as an interpretation, it not only becomes transparent but also negotiable. Newer application models of cognitive mapping particularly are geared towards aspects of strategic marketing. Especially the representation of socio-cultural trends (Liebl 2000b), of customers' worlds of imagination (Rughase 2001; Liebl/Rughase 20002), and of brand images customers have (Herrmann 1999) belong to this ­ an interpretive access to the customer that substantially differs from the quasi-objective, essentialist oriented market research with its standardised survey methods. This approach towards generating strategically relevant information is necessary, as customers usually are not able to articulate what their concrete demands to a product are. And even product tests done with focus groups offer ­ in all experience ­ only few hints as to the actual chances of success or failure for a product. What can be investigated by an interpretive access are docking points, which can be made use of by marketing concepts. This form of Operations Research used in the strategic concept takes OR's original self-image of interdisciplinary ­ strictly speaking indeed anti-disciplinary (cf. the statement of Ackoff (1994) to this) ­ work seriously and pushes it in the direction of ethnography and anthropology. Because ultimately the customer is nothing else to a company but a foreign tribe, whose culture ­ circumstances, rituals, behaviour pattern, and assignments of meaning ­ must be understood.

Asking for possible analogies in the area of design reveals striking parallels. An understanding of "Strategic Design" analogous to "Strategic OR" would thus pick out the role of design in strategic contexts as a central theme in a process oriented logic ­ particularly for the development of strategies. And that is exactly the case. Renault's chief designer Le Quément stresses the point that the development of model-concepts, such as Scénic and Avantime, are specifically not directed by results of market research. According to his statement it would not be possible to reach innovative concepts by asking consumers what they want. It would rather be a matter of giving the customers something they never knew they were looking for, but of which they would say that they had in fact always wanted it when they finally got it.

(Büschemann 1999). The task of design under conditions of high uncertainty is not so much analysing a problem with the aim of developing a solution to it, but rather it is a matter of interpreting the new situation.

This point is emphasized in the work of Lester/Piore/Malek (1998). The authors punctuate that General Management in general and strategy development in particular can learn effectively from the interpretive access of design. To cut a long story short: The quintessence of strategy consists in always keeping interpretation resp. re-interpretation processes in motion inside a company. Concerning the outside-in-perspective, meaning the environment, this stands for continuously subjecting information (about customers, trend, etc.) gathered from that environment to new interpretations to elicit docking points for new possibilities in product design, scenarios, and company communication. What new (unexpected) meanings are allocated to the products by consumers and how are they (mis)used? These are two of the most important central issues always keeping in mind de Certeau's finding (1988) that a process of consumption is actually a subsequent production process (cp. Liebl 2001a). Concerning the Inside-out-perspective, however, this means constant review of the company's own competence and resources in order to be able to adapt quickly to changing ambient conditions. Adaptation, meaning adjustment following change, is much too sluggish a mechanism to be a useful procedure in times of time-based competition. The permanent re-interpretation of one's own resources and competences, however, consequently attempts to re-interpret that which already exists in a way so it can be used in totally different contexts, yet still target oriented. This corresponds to the logic of exaptation (Gould/Vrba 1982), an item whose existence can be proven by evolutionary biology. It was found that species that did not need to go through the long-winded process of adaptation had greater chances of survival. Those species already possessed features developed under totally different circumstances that could ­ through re-interpretation and misuse ­ be used under the new circumstances, too. Integrating the inside-out- and the outside-in-perspective leads to a comprehensive "interpretive management", in which design ­ according to Lester/Piore/Malek (1998) ­ can play a substantial part especially due to the interpretative access peculiar to designers. In this way, strategic design is synonymous to the application of design- (working-) principles in strategic contexts.

Interpretive approach: On the way to strategic market research-design

The interpretive game and the resulting understanding of the users' culture is made particularly and radically clear in the placebo-products of Dunne + Raby. For Fiona Raby's and Anthony Dunne's quasi poetic access to design depicts at the same time an access to the environment of the users. Basically they offer something like "unknown design-objects" to the users, i.e. objects that seem to have no concrete practical purpose, at least none that we know from conventional tools or furniture in our households. How then do humans interpret objects for themselves, which a priori have an indistinct and unusual use and are ­ as far as their possible handling and their appropriation is concerned - not defined yet? Which attributions and usages will finally result from it?

Dunne + Raby (2001) formulate the keynote of their radically interpretive game, which is not aimed at the affirmation of predetermined judgements, but rather at downright ethnological discovery, as follows: "Electronic objects are not only 'smart'. They 'dream' thinking of them in terms of dreaminess rather than smartness opens them up to more interesting interpretations." Dunne's + Raby's so-called placebo products return to exactly this point. They do fulfil certain functions and most of them react to electromagnetic rays, which increasingly permeate and mark our living space. So the products themselves are electronic objects, too, and they are endowed with sensory functions we as human beings mostly lack; that is what makes them so interesting. How do humans now deal with objects that possess attributes foreign to humans, and which make the invisible architectures of the more and more electronically marked living visible? For a secret world of rays surrounds the televisions, VCRs, computers, mobile phones, and microwaves in our apartments.

Among the drafts of placebo-products the following can be found e.g.:

- a table with about two dozens of compasses that point out to all directions if electronic tools such as mobile telephones are brought into their vicinity;

- a table with a GPS-receiver, which indicates its actual position to the user on a display ­ or just announces that it is "lost" if unable to receive a signal;

- the Nipple Chair, whose nipples begin to vibrate if any rays permeate the upper body of the one sitting on it;

- a lantern, the Parasite Light, which sucks in the electromagnetic fields it is surrounded with like a parasite, in this way regulating its luminosity;

- an Electricity Drain Stool, which discharges a person sitting naked on it;

- the Electro Draft Excluder, which acts as a shield against electromagnetic radiation (Dunne/Raby 2001).

What looks like a strange manner of exploiting diffuse fears of electric smog in truth goes far beyond such questions conceptually and aims at the central problem of design, namely perception. Dunne + Raby phrase this in an interview (Rahm 2001) as follows: "If we look at an electronic product we only see a small part of its radiation, namely the radiation which appears in frequency ranges that can be seen with the naked eye. If we could see or perceive low-frequency radiation, electronic objects would look very different to us. Their boundaries would reach much further into the room and they and other objects would permeate one another, whilst at the frequencies of visible light they are totally separated." Rahm sums up (2001) that the approaches of Dunne + Raby mean, in front of this background, the expansion of the designing zone to de facto invisible areas.

This expansion goes along with enhanced possibilities of researching customers, which is the goal of "Strategic OR" and it thus opens up essential strategic perspectives. The described prototype uniques were distributed to interested individuals by Dunne + Raby during an exhibition at the Victoria & Albert museum. The recipients adopted these strange furniture items/objects for several weeks and took them home. Afterwards, the designers questioned them about how they had used the items, what stories they had experienced with the placebo-products and what kind of relationship they had developed to them. A striking fact stated again and again was how much the users had experienced the objects' behaviour as some sort of individual existence. A lot of them had come to regard the placebo-product as a sort of pet after a short time, with which some of them had even communicated intensely. Anthony Dunne reported of users who, after coming home, immediately checked whether their GPS table felt "lost" or "connected". Because of this it was hard for many of the users to part with the stubborn and sometimes even rebellious items they had grown so fond of (Dunne/Raby 2001).

Other important attributions of meaning that came to light through the course of using the objects concern the categorization of the object as furniture or gadget ­ a fact that implies massive divergences in usage behaviour. While actually an interpretation as a piece of furniture leads to long retention times in the household, an attribution as "gadget" clearly signalises a short life span and the danger of premature disposal ­ regardless of the actual product features and the technical life span (Dunne/Raby 2001).

A strategic orientation concerning innovations and product development thus means the following: If you want to know how customers use and interpret innovations, you need an understanding of how users get their bearings in a terra incognita of usage and meaning. The user acts, Anthony Dunne (1999) writes in his book "Hertzian Tales", as a protagonist in a movie would, developing a story (in this case his own story), his own fantasy and his world of imagination. Analogous to cinematic history, Dunne + Raby call their approach "Design Noir". They relate this analogy to "the concept of the anti-hero and people who move in a dark landscape, always alienated, never really being able to find each other or to fit into the scheme, and always forced to struggle with dilemmas and existential questions." In the form at hand, strategic design last but not least also becomes strategic market research design.

In a modified manner Alessi, too, practises such a strategic market research design. The company owner Alberto Alessi (2000) emphasizes that his company quite purposely brings products to the market that are quite formally and functionally experimental ­ with an accordingly high danger of flops. According to Alessi, a view of the sum of flops and successes indicates the border between the acceptable and the unacceptable. If one only produced successes, then the location of that border would be unknown. By doing so, one would lose the ability of remaining "cutting edge" in the future. Extravagant flops hold a strategic function central to brand leadership and product development that goes far beyond the suggested pure transfer of image. From this one can see that unconventional ways are often required to gain target-oriented and substantial information about trends and to stay informed about the clientele's disposition.

Summary: Strategic Design als Cultural Hacking

The approaches of strategic design practised by Alessi and Dunne + Raby have above all one thing in common. It is not so much a matter of designing a product adjusted to the customers' preferences to the greatest possible extent, but rather a matter of a subversive exploration of new cultural spaces. It is a matter of a veritable "cultural hacking" (Liebl 2001b), which goes beyond the techniques of "Emphatic Design" (Leonhard/Rayport 1997). On the one hand products and brands are hacked with the aim of determining what is already deliverable and what still goes too far, and how much stretching and dislocation the brand can endure resp. deliver. On the other hand the customer, his world of imagination and his living environment, his culture, are hacked. By doing so the customer's docking points are explored, to which the potentials of usage and interpretation of innovations can hook up ­ the strategic central question of all (Liebl 2001b, Liebl 2001c).

The metaphor of cultural hacking seems to be so particularly obvious, because it alludes directly to the world of computers and data networks, to the playful and explorative usage of culture techniques. The metaphor of design that has been bereft of meaning by business thinking is thus infused with new life. The question that has to be asked is whether any more can be done at all. For methods cannot be proven theoretically, as last but not least the discussion about the "scientific method" of operations research has shown for decades. They can only be judged by means of their capability ­ especially their problem adequacy and their ability to supply information crucial to decision-making.

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Biographical note

Franz Liebl, geb. 1960, 1981-1986 Studium der Betriebswirtschaftslehre an der Ludwig-Maximilians-Universität München; 1986-1994 wissenschaftlicher Mitarbeiter am Institut für Systemforschung der Universität München, von 1990-1994 dort stellvertretender Institutsleiter; Promotion 1991, Habilitation im Fach Betriebswirtschaftslehre 1994 mit einer Arbeit über Strategische Früherkennung und Trendforschung. Von Oktober 1994-Oktober 1998 Inhaber des Lehrstuhls für Allgemeine und Quantitative Betriebswirtschaftslehre an der Wirtschaftswissenschaftlichen Fakultät der Universität Witten/Herdecke. Seither dort Inhaber des Aral Stiftungslehrstuhls für Strategisches Marketing und Leiter des Competence Center Strategie&Marketing. Forschungsschwerpunkte: Strategisches Management, Issue-Management, Business-Design, sowie Marketing unter Bedingungen gesellschaftlicher Individualisierung. Seit 1983 Veröffentlichungen zu den Themen Jugendkultur, Subkultur und experimentelle Musik. Von 1982-1990 Inhaber eines Tonträger-Labels und -Vertriebs für experimentelle Musik. Seit 1982 Teilnahme an Mail-Art- und Mail-Music-Projekten; seit 1995 Aufführung von Theorie-Performances in der Reihe "Unbekannte Theorie-Objekte der Trendforschung". Seit 1998 regelmäßiger Kolumnist für die New-Economy-Magazine Econy und brand eins.