8:50 Chris Meyer, Monitor Network

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[David McGaw]

Chris mentioned Facebook in his talk... there's an article in the May 15, 2006 issue of The New Yorker (the issue in Strategy Conference attendee gift bags) profiling Facebook.com and its founder Mark Zuckerberg. The full text isn't available online, but you can find highlights here: http://www.newyorker.com/printables/press/060515pr_press_releases

[Carol Coletta]

Although the water was too tepid to steep a tea bag, the event started strong with a room full of people who were clearly eager to connect.

A few words from our sponsors…

We learned that the Institute of Design is about to launch a combination Master of Design/Master of Business Administration program so that more students are prepared to participate in today’s wealth creation process. Very exciting.

And Bruce Mau’s exhibition, “Massive Change,” is coming to the Museum of Contemporary Art this fall. “Massive Change” is not about the world of design. It’s about the design of the world. In connection with the exhibition, the Visionary Symposium is planned for November. It’s a partnership between Museum of Contemporary Art and the City of Chicago’s Department of Environment.

First speaker is Chris Meyer of Monitor Networks. The title of his presentation is “Networks, Innovation, Human Capital and Economic Evolution” OR Networks: A Theory of Everything.

Evolution can be viewed as a process of the gene trying to reproduce itself.
But, according to Richard Dawkins, author of “The Selfish Gene,” in our lifetimes, we won’t see genetic evolution. What we’ll see is meme change.

Memes are habits, skills, ideas. They are copied and passed from person to person, and they shape our minds and our culture. Networks are the substrate so that memes can move around at greater speed.

How Technology Moves through Our Economy: Science -> Tech -> Business -> Organization -> Information Economy. It is a predictable progression. (Value-Add Chain) What will the organizational adaptation be? That’s where we are today – between business and organization. From crunching to connecting.

Drivers of Networked Innovation: Science, Behavior, Technology (most apparent) Where they intersect, we create economic opportunity. (Today, people can be targeted according to their network behavior. It’s called behavioral technology.)

Technology is the apparent driver of networked innovation, with technologies like RSS, Reputonics, VOIP, Tagging.

But that’s not the essence of the meme of networks.

What is less familiar is what’s going on in the world of science:

Chemical reactions -> Life
Genetic interactions -> Ecology
Business transactions -> Connected Economy

Ray Kurzweil: The rate of progress is not going to remain at today’s rate; it’s doubling every decade. We’ll make 20 years of progress in the next 10 years.

Small world networks – not regular, not random. Introduce randomness and your chances of meeting someone outside of your “silo” increase. There is an underlying regularity to what makes networks work.

The constraining driver is what people are willing to do. The constraining driver is behavior. However, MySpace, MeetUp, OpenTable are demonstrating changing behavior.

An interesting thing happens when you connect autonomous agents. Without anyone controlling it, the system is improving itself, just by being connected.

Chris offered the example of Affinnova as an example of evolving direct mail. The concept is allowing the “environment” breed “fitter” design, but you’d have to convince me. It’s a designer’s nightmare, imo.

How can networks help mobilize today’s scarce resource, human capital?

“When the rate of change outside exceeds the rate of change inside, the end is in sight.” Jack Welch.

Monitor Networks is facilitating the mobilization of business, science and policy talent. The business of Monitor Networks is to represent talent and to help them find gigs. They apply talented people to corporate problems by forming applied innovation networks to produce new products and services and new capabilities. They call it WorkNet. The idea is to start with the work and end with the net. They begin with the work, then identify the talent needed to do the work, create the exchange among the talent to do the work, and then the experiences to support the exchange.

We are the web, Kevin Kelly reminded us. We are constructing the largest social machine the world has ever seen. The web is turning egocentric individuals into a powerful invisible mind, able to create new services and products, and consume in a new way of doing business.

Futuremonitor.com is attempting to create a 2-year view of what will happen, and Chris invited us to join.

Rob Forbes was up next. He is the founder of the fabulous chain of stores and the catalog, Design Within Reach.

He is the internal design advocate, but he takes his inspiration from cities. Cities, he says, are significant design statements. Some of the 5000 photos he takes every year end up in his e-newsletter. Sidewalks are his “information highway,” and he calls himself a streetwalker. He is more impressed by the way places get used, rather than how they look.

Rob thinks of DWR as a design company. But the company has run into problems this year, firing its CEO and its head of marketing. So Rob is reevaluating the company asking questions like these: Are we a well-designed company? Has design been central to our strategy other than in the products themselves? How do you measure the value of design?

What is design? Rob uses these descriptions: Design is the artful arrangement of materials or circumstances into a planned form. Design is function with cultural content.

Rob’s business objective is acquiring and retaining the right customers. “If we are a well-designed business, DWR will acquire and retain the right customers artfully with a plan.” (Rob believes that the customer is not always right. He believes the right customer is right.)

DWR’s studios break traditional retail rules. You won’t find lifestyle scenes in DWR. Instead, the products themselves are showcased. They keep no inventory, and they hire experienced people who understand the products.

Artful business design strategies employed by DWR:

Lengthy gestation period for business planning
Quickly profitable without much cash
Single common inventory
Multi-channel reach
Strategic partners with production capabilities
Elimination of middlemen

But, Rob noted, DWR is artful only in an archaic industry (furniture).

DWR would love to be the place where the next smart car is launched.

Design Notes is Rob’s e-newsletter. It now goes out to 400,000 people on a weekly basis. (It has never been advertised.)

“We are known for a conversation with our customers more than anything,” Rob said. He views retail as a conversation with your customers.

Rob was very frank about the non artful design decisions that have been made at DWR. They include needless complexity, technology oversights (He told a disaster story about a new information system that keeps information from flowing.), engineering oversights, style before substance decisions, lack of innovation in the traditional retailing mindset and the tendency to slide into typical retail paradigm.

Simplicity and differentiation is key to our business. Google hides complexity behind simplicity.

Rob complimented Seth Godin’s book, “Purple Cow,” and its emphasis on remarkability.

DWR’s best performance has been in periods of necessity. Its worst has been when the principles that drive its products decisions

Branding has become a leisure activity, and he fears that design is in danger of entering that same category. That is something to guard against.

[Carol Coletta]

Chris Meyer's Reflections on Strategy '06

Chris Meyer stood in for Bruce Nussbaum to wrap up our two days of discussion. Every meeting organizer should be so lucky.

Chris organized his reflections as context (the past), merging (the present) and emerging (the future).

It would be nice if context were shaped only by the present, but, in fact, the past informs context. Business culture today has deeply embedded in it that systems are static. If it ain't broke, don't fix it captures that idea. But we live in a time of accelerating change.

In nature, ants are constantly exploiting the existing niche and exploring a new niche. When a niche closes, they explore more. But when a business niche begins to close, business tends to fire the explorers.

Business, then, doesn't have the culture to explore. That's why, as Business Week famously declared, the MFA (in our case the MD or MDM) is the new MBA. Art school explores. B-school exploits.

Chris suggested thinking of the relationship between business and art using a matrix. Vertical axis has rigor at the top, lack of rigor at the bottom. Horizontal axis has closed minded on the left, curious on the right. On Chris' matrix, business sits in the top left quadrant (high rigor, low curiosity), art sits in the bottom right quadrant (low rigor, high curiosity. Innovation sits in the top right quadrant, and that's where business and art must intersect.

The present is about merging art and business. As we restructure entities around the reality of a new infrastructure we will create a new value chain, every bit as powerful as the value chain in an earlier era built around new logistics capability.

The power shift going on puts customers in charge. Don't fight customer power, he warned the designers and innovators in the audience. Bring the customer voice into the economic system in a valuable and powerful way.

A question for the future that is emerging is how will we organize the economic system? While Chris admits he doesn't have the answer, he believes the answer will have these characteristics:

* Customer-created value
* Bottom-up governance
* Network determining things collectively
* Serving the "Bottom of the Pyramid" emerging market

The big design challenge will be designing organization structures for a post-corporate economy.

He reminded us of the value of diverse teams: Different people see different things and create differently.

Loosely quoting Tom Stoppard, Chris left us with this thought... "It's the best possible time to be alive when everything you thought you knew was wrong."