Design Thinking Digest

The Minneapolis PhizzPop Challenge: Posted

Here’s the challenge that the PhizzPop Minneapolis teams got on Friday, January 9 at 4pm CST.

If you haven’t registered to see PhizzPop in Minneapolis there may still be seats available. Go to www.phizzpop.com and register right away we’ll do our best to accommodate but are literally with in a dozen seats or so of being full.

Touching consumers:
Thriving with online retailing and multichannel promotion

Overview
2009 represents one of the most challenging environments that retailers in the US have experienced since the Great Depression, these challenges extend to the entities that also distribute their products through retail channels—including content creators, consumer electronics, clothing, consumer and packaged goods, etc.

Online revenue for traditional online retailers has dropped 2% this year after 5 years of 20% growth. Revenues during the November to December season for traditional physical retailers (which represents 30% of the retailer’s business is down 7%) making for one of the worst performing years for traditional retailers since records were kept.

However, austere environments often create optimal opportunities for new business models and consumer experiences. You’ve recently been retained by a private Dutch-based company that currently owns and operates a variety of pharmacies and supermarkets in the Southeast United States and a number of big box retail chains in Western Europe, they’ve hired you to help them with a new physical and online shopping venture they’ve launched in 5 physical locations in each of two test markets, the Minneapolis metro area and Denver/Boulder metro area and across the US via an online channel that is tightly coupled to their physical operations.

Your client’s enthusiasm has been bolstered by the recent and continued retail success and resurgence of stores like Wal-Mart and Target that cater to different spectrums of the big-box retail market and on the high-end with retail stores like the Apple Store in the brick and mortal world.

They’ve also watched with enthusiasm as Amazon has quickly become ascendant in the online retail space and become even more interested in how nimble and adaptive competitors such as Netflix have rapidly evolved their business models.

There are a few pieces of information that they’ve asked you to ponder closely as you work with them.

One is a recent report by a trusted market research firm that found that brands are critically important to socially connected consumers, to the degree that socially connected consumers valued content created by their favorite brands more than peer generated content. Your client is very interested in how technology and social media can leverage their own brand and the brands they sell. They want to take that have social currency to increase relevance, affinity and loyalty consumers.

The second item is that your client is struggling with the success Amazon is having with programs like Amazon Prime and they are eager to explore experience strategies that can engage an audience that doesn’t always require instant gratification or can leverage any unique characteristics from a technology or services perspective that can enable new, disruptive experiences that increase relevance, affinity and loyalty with your client’s venture.

The new CEO of this consortium spent the previous three years in Europe in managing the firm’s retail expansion in big box stores. After much thought and how to best leverage the consortiums resources he chose to play on the firm’s strengths. In an effort to enter the US market they’ve focused on the concept for a new type of retail store that merges the mass market success of big box retail like Costco, Wal-Mart and Target with some of the brand affinity of stores that aspire towards the mastige like success of alternative groceries and coops such as Whole Foods, Trader Joes, and REI.

As a consultant and trusted advisor to this CEO you’ve been asked to develop a proof of concept that can be given at the firm’s board of directors meeting that can demonstrate how technology can be used both in a store environment, in physical branding and promotions both in the store and out of the store and via experiences on the store’s Web site and third-party online Web properties.

Although the primary objective of this exercise is to demonstrate that this retailer has a ‘plan’ to its increasingly fidgety board of directors, there are also critical secondary audiences whose objectives must ultimately be met, and include:

1. Price conscious consumers that must be inspired or incented to begin a relationship with the retailer with repeat purchases of consumer packaged goods, house wares, clothing, toys, consumer electronics and media.

2. Consumer packaged goods and consumer electronics manufacturers that are eager to determine new ways to position their products and (increasingly) services to consumers in physical and virtual channels that provide differentiation and value

3. Media companies that distribute books, magazines, audio and video content in both physical and (increasingly) digital formats

4. Other emerging next generation service models that can generate revenue and brand affinity around these repeat purchase behaviors with consumer packaged goods, consumer electronics and content.

Assignment

Your assignment is to demonstrate next generation scenarios that can enhance physical shopping scenarios, brand awareness and improve online promotion and traditional online browsing, selection and cross-sell scenarios.

How can social media, services, digital distribution and enhanced experience design differentiate customer purchasing scenarios? The CEO has asked you to focus on the following areas:

1. Encouraging repeat purchases of consumer packaged goods, or the key drivers of the retailers revenue “beer and diapers” and more mundane goods like laundry detergent and clothing.

2. Offer compelling alternatives to secondary competitors that are eroding physical media sales, such as the Apple iTunes store, Netflix and Blockbuster.

3. Determine how an over arching strategy of web-based services and advertising models could or should be a part of this firms strategy for the above category or a more traditional category such as consumer electronics, pharmacy services, registry, etc.

Your client is adamant that you focus your thinking on both the attract and engage modes of the consumer experience and is less concerned with the specific purchase and sustainment phases of a consumer lifecycle. This means your solution should focus on.

A. In-store or out of store promotion scenario using technology (mobile, digital signage, kiosks, other) that utilize unique Windows mobile, touch or services-based solutions.

B. An online interaction via the client site or a third-party site that leverages Microsoft technologies such as WPF, Silverlight or Live Services technology that demonstrates a promo, configuration, acquisition, usage or services scenario.

Assumptions

• A multi-platform Web-based experience is part of the expected solution proposals
• A much of your demonstration as possible should contain real interaction components and data exchange (which can run locally, leverage APIs, reliable internet access will be available to all teams)
• For promotion focused scenarios we’re not expecting teams to be experts in online coupon fraud, promo-code redemption, etc.
• The use of services and social media strategies should be used to extend at least one scenario
• Channel optimization across different types of channels and mediums (Mobile, in-store, touch interfaces, desktop clients, disconnected experiences should be used to extend at least one scenario
• Variations or parts of the experience can be delivered to desktop, laptop, tablet, mobile device, Surface, etc…
• Solutions should make use of technologies and services that provide rich, interactive, unique and collaborative experiences that leverage the best of Web 2.0 and social media, but it should also extend the capabilities and effectiveness of these services. (Including use of audio, video, etc.) where a unique and valuable experience can be added.
• Interface(s) must be delivered as Microsoft WPF and/or Silverlight 1 or 2 experiences as a core enabling feature.
• A Microsoft Surface and HP Touchsmart computer will be available to demonstrate scenarios on if requested. You’ll be able to test your solutions on this equipment starting Tuesday morning at Microsoft offices.

The name of this venture is Indigo. When asked to define the style and tone of Indigo one industry pundit said that Indigo is… “What would happen if big box retailers married the customer experience of Nike’s marketing with Nike.com and the user enthusiasm of friend feed to sell you zit cream, movies, iPods and IKEA furniture.” In bus stops and transportation hubs in Minneapolis and Denver they experimented with the following campaign.

Considerations

The following are considerations, not guidelines that should be evaluated when designing a solution:

• Extending the experience outside of the retail physical and online brand experience (including but not limited to Windows Live Services and leverage third-party communities—thinking beyond just Facebook, etc. but also looking and community sites for brands, ie pampers.com as an example, or affinity marketing such as the working lunch site (http://workinglunch.msn.com)
• Looking at how advances in visualization, viral marketing, relationship marketing, affinity marketing, casual gaming, advocate networks, offline applications can be utilized for this effort. For inspiration see http://www.artefactgroup.com/portfolio/nau/.
• Integration of Microsoft Live Services such as http://maps.live.com/ and http://dev.live.com/ and http://www.windowslive.com/explore.
• Usage of QR codes or online promotion and coupons and other next generation tagging and geo location services. See www.microsoft.com/tag.

Personas

Sandra Ladd, Mom

Sandra is a 51 year old homemaker in Littleton, CO. She’s just getting settled into a new townhome that she purchased with her husband after sending their youngest child off to college at the University of Texas. Her husband recently took a voluntary ‘retirement’ package from his employer and is now consulting part time—for a fraction of his previous income. Because the Ladd’s were planning on a retirement in a few years they are taking advantage of this opportunity to move into a new phase of their lives.

The have less money to spend, but they also have less expenses. Their son’s college is paid for with previous funds and their retirement savings is relatively intact. Sandra’s most recent splurge? Trading in the mammoth family Suburban for a Toyota Prius. Sandra is determined to put her family on a path towards simplicity, she’s exhausted from raising three children in a mammoth house, driving massive cars and just doing everything…well big. The Ladd’s would be considered middle-upper class by most standards and as Sandra sees what’s going on around her with the economy and even a few friends that are experiencing financial difficulties she feels a bit guilty about some of her families more conspicuous past consumption. But…she’s still got a new town house to decorate and now is the time for her and her husband to enjoy some of the simple pleasures and fruits of both of their labors. She’s using some of new found time with her husband to volunteer at a few local non-profits that they are both respective board members of and get more active in their local school district—which served their own children so well.

Sandra goals are to continue doing the simple things she enjoys, but she’d like to simplify what she does and minimize her impact on the world. She’ll still continue to by the cosmetics and brands that she loves and she’s also got a home to decorate, but she’d like to be a bit more intelligent about how she goes about decorating this time. She’s mostly looking for simply accessories to accent what she already has and isn’t in a particular hurry to get things done. She’s begun shipping care packages to her son at the University of Texas but has become a bit a frustrated when her youngest son complained about the Guns and Roses Chinese Democracy CD she sent him.

“Mom, nobody listens to CDs!” he told her on a recent phone call.

“You’ve been waiting for that one to come out for years.” She replied.

“That’s true he said, but not in this format, I’ve moved on.”

Sandra promised no more CDs but privately thought “I raised that kid for 18 years and I’ll be damned if I’m not going to continue to mother him.” But…the next time she sent him a gift card to download music on Amazon.com.

 

Philip Mendoza, Business owner

Philip mad a frantic call to his wife as he drives to work on Monday morning and takes an exit ramp on the expressway and prepares to return home. His wife answers the phone.

“I’ve got it.” She said. “I’ll be waiting for you. Can you still make your meeting?”

“Yea, it will be close but I’ll make it. You’re the best; I’ll see you in five minutes.”

With his video projector now safely in his trunk and ready for his meeting as he drives into downtown Minneapolis Philip starts running through a list of what he needs for his office. Post it notes, coffee, tea and small TV for the reception area. He’s certain he’ll forget most of this. What was he thinking when he left his cushy job to start his new business? He missed being able to dump a pile of receipts on his assistant’s desk and have her reconcile his expenses as he focused on what was ‘important’. Right now, everything seemed important as a business owner. Already locked into a lease because he didn’t negotiate favorable terms he’s determined to be smart about every decision he needs to make. But…”I’ve got to focus on what’s important too, growing this business and landing deals that pay us.”

Philip is the type of guy that starts a project at home and spends about as much time running to a Home Depot or a Lowes as he does doing the actually project. About 25% of the time he winds up hiring a professional to redo much of what he simply didn’t do well.

As a small business that consists of only himself and a part time receptionist he needs a simple way to keep on top of the little things he needs for his modest office. He looks at his calendar on his smart phone and notices that he’s got 6 meetings scheduled over the next 8 days at his office. “I use Skype for my offshore team, Trip It for travel, Mint for my finances. Why can’t I find an easy way to keep note pads in the office, staples in my stapler and Red Bull in the fridge?”

Philip’s not going to enter into any long term agreement or relationship with the multitude of companies and partners that can help him with his business. He’s too cheap and too unorganized to want a long term commitment. He goes to Office Max when he needs to and the grocery store when he needs to, he loves serendipity but realizes he needs more discipline and structure too. He needs someone that can help him keep the office coffers stocked with supplies and food and handle the last minute fire drill. What he really needs is someone that can tell him what he needs before he needs it.

 

Manuel Rob, College student

Manuel glances down at his cell phone and sees that it’s his local video store calling. He looks over at the dresser in his bedroom and knows immediately that they are inquiring about the DVDs that he checked out—4 weeks ago. “I need to get another NetFlix subscription”. He thinks, but then he remembers he had one, one that got cancelled after his credit card expired. He never bothered to update it and still has a movie on his shelf, “The Wages of Fear” that he checked out for a cinema writing class he had last semester. He sighs as his roommate comes in his room and asks if he’d like to go grab lunch.

“Not with you! I take care of myself and I know you’re just going to the Italian Beef place, it will screw up my work out this afternoon if I go there with you and all that salt will mess up my skin.” He states.

“Suit yourself you metrosexual prima donna.” Says his roommate as he grabs his cellphone and heads out the door, but before he leaves, he stops, “Hey, I forgot, you’re Mom called. She wants to know what you want for your birthday. I suggested a new attitude and she agreed but you should let her know if there is anything else. Oh, and I ate all your beef jerky and those dried cranberries you had laying around for breakfast, you should get some more.” The shoe Manuel threw at his roommate landed with thud against the door as his roommate sprinted out of the apartment.

Manuel flopped down on the couch and grabbed his laptop. “I should write that summary on Revolutionary Road for my lit. class now.” He thinks. Instead he watches Futurama and South Park on You Tube for a half hour and engages is a lively debate on Friend Feed about the pluses and minuses of various herbal supplements and facial moisturizers.

Finally he writes his short summary paper and hits print. As he surfs afternoon television for a few moments before departing for class he hears his printer beeping in his room. He walks into the room and discovers his printer is out of ink. He grabs his jacket, book, laptop, phone and MP3 player and heads out the door towards the library to print out his paper before his class thinking that perhaps he’ll pick up that new Robert Downey Jr. movie after class. “I just need to see if I can chase someone down to watch it with me.” He thinks but then remembers that he’ll actually have to buy it if he wants to watch it too as he’s persona non grata at all of his usual rental outlets. He ponders this as he walks to class thinking if he was a bit more together he could be having his family getting him some of this stuff for his birthday. He also remembers that his sister’s birthday is coming up quickly too. He knows he needs to get her something nice (but inexpensive as he is a college student after all) after she had been very generous and purchased an Xbox for him over the holidays. “I better show I care.” He thinks.

 

Ruth Cho, Global Product Manager, Consumer Packaged Goods Company

Ruth looked at her computer screen and cringes as she reads how Wal-Mart has missed its earning guidance. What is most troubling is that in a dismal year Wal-Mart is the highlight, outperforming all of the other retailers and grocers that carried the brand of frozen and refrigerated baking products and meals that she was the global product manager for. As she stepped out of her office and into her ‘war-room’ it was hard to fanthom how it would be possible to successfully launch the four new products from their portfolio in the coming year.

“What are we going to do?” She thinks. Recently negotiations and agreements with retailers and distributors had become even more painful coming out of a holiday season where every retailer had tried to out Wal-Mart Wal-Mart and, in effect, hurting everyone. But the year was not without highlights. Brand satisfaction and awareness was at an all time high for almost her entire portfolio. This was largely credited to Mrs. Cho’s efforts in conjunction with the CMO and CTO to overhaul the infrastructure for all of their Web properties and consolidate the agency vendor list that produced the myriad of branded sites for her portfolio.

The results were impressive on two fronts. The master brand site had been live for only 18 months but already had 1o million members. A recent affinity campaign done with a third-party portal and social networking site had brought over 600k new members to the site. “But how can I capitalize on this?” She wonders. She looks at her calendar and notices that she’s got a board meeting with the retailer Indigo, a position she was asked to take because of the industry recognition of Mrs. Cho’s success with using communities to increase affinity and loyalty with her brands. “I sure wish some of our partners could demonstrate how we could extend and leverage this.” She thinks.

Something new: BizSpark

Design Thinking Digest has been a bit of a ghost town lately and that’s largely due to two big efforts I’ve been focused on. One is the return of the PhizzPop Design Challenge Tour in the US (which I’ll talk about later) and a new program we announced today called BizSpark.

Some background. It’s sometimes easy to forget the roots and heritage of a company like Microsoft. Like many great businesses of yore it wasn’t sketched on the back of napkin but formulated in a dorm room. It was started by folks with a sense of curiosity—an itch that needed to be scratched. Sure there was ambition, there was also risk, but the founders of Microsoft had something that every great company also had that is seldom discussed. Someone that believed in them and enabled them.

In the case of Microsoft this occurred after Bill Gates called the creators of a new microcomputer called the Altair 8800. Bill and team demonstrated an implementation of the BASIC programming language for the system and afterward the computer maker agreed to distribute Altair BASIC. This enabled (or encouraged depending how you think about this) Bill Gates to leave Harvard and move to Albuquerque, where the computer manufacturer, MITS was located. It was there that Microsoft was founded.

So, how does Microsoft pay this forward as it were? One way we do this is through programs focused at higher education.

One of these programs is called DreamSpark. DreamSpark enables any eligible post-secondary student to download professional design and development tools from Microsoft at no charge during their education. This program is supported by active communities and a global innovation challenge that is called Imagine Cup.

But today Microosft is announcing that we are taking the principles of DreamSpark to a new level and a new audience. That audience is entrepreneurs and the program is called BizSpark.

BizSpark is a global program that will help startups grow into successful businesses through software support and a vibrant ecosystem that will allow new startups to deliver superior business advantage.

We’ll do this in three ways.

1. We’ll help startups receive fast and easy access to Microsoft’s current full-featured development tools, platform technologies, and production licenses of server products for immediate use in developing and bringing to market innovative and interoperable solutions with no upfront costs and minimal requirements.

2. We’ll also help startups receive professional support from Microsoft and BizSpark Network Partners around the world who provide a wide range of support resources for software startups. Network Partners are incubators, investors, advisors, government agencies and hosters who are vested in software-fueled innovation and entrepreneurship.

3. Finally, we’ll help startups get visibility. A dedicated Website, the BizSparkDB, will highlight promising companies from around the world every day. Through their relationship with Microsoft and BizSpark Network Partners, startups will achieve global visibility to an audience of potential investors, clients and partners.

Every great idea needs a little push to be successful.

BizSpark will support startups with a global community of peers, entrepreneurial resources and experts who can help address the unique technical and business development challenges that startups face. 

If you happen to be in Chicago on Thursday you can join me for an event where we’ll discuss what BizSpark means for Chicago.

Please RSVP here or drop me or, if you have questions, drop me an email.

Addendum:

Some great insight on BizSpark.

Microsoft Jump-Starts Global Entrepreneurs With BizSpark

Microsoft BizSpark Puts Startups on the Path to Business Success

Microsoft's BizSpark initiative offers free servers and software to startups

Microsoft offers free software for start-ups

Microsoft launches BizSpark program for startups

Introducing the startup of the day!

http://www.typepad.com/t/trackback/513652/35371200

Looking Closer: The future of the startup

Starting with a post by Jason Calacanis we see that the hangover of our overinflated economy is starting to impact the lifeblood of innovation in our culture, the startup. I suspect things will get a bit worse until they get better but some of the best innovations of our time in business models and products have been borne of grim economic realities. Regardless if you’re in a start-up or not there are some important things to consider.

If you’re a startup it’s time to give up the bread and circuses approach to running the business. Provable revenues matter more that share right now and leveraging technology, frugality, and business acumen to get to them quickly are more important than ever. There’s still a lot of capital in private hands right now that is looking for a great place to be. If you can demonstrate that you’re a good place for that exciting things can happen.

If your a service based company or a larger company think about what kind of services can you provide that can help startups overcome many of the obstacles they face in technology adoption or business market validation. It will be interesting to see what companies to do address these realities and continue to enable startups. Startups that can leverage accelerators to get there businesses spun-up and generating revenue will be the only game that matters soon.

The Olympics Tipping Point: Why Television will never be the same.

I think the 2008 will be looked at as the year that television and how we think about broadcasting begin to alter into something that would be unrecognizable only a few years ago.

The catalyst for this? NBC's broadcasting strategy for the 2008 Olympics. It's easy to look at what's disappointing about this effort (The lack of access to this great tool outside of the US and the somewhat challenging process of identifying your local NBC broadcaster but the benefits of NBC's actions and consumer demand will, I suspect, make these constraints go away in the future too.

NBC is basically conducting the largest online media event that has EVER been done on the Web. They'll offer up over 3,600 hours of video coverage and highlights that will reach tens of millions of viewers and enable hundreds of thousands of viewers to CONCURRENTLY watch events live or after the fact in the most mainstream Web browsers available for Windows PCs and the Mac. Below is a screen capture of the enhanced player with LIVE commentary.

The site is about far more than just streaming video. Enhanced modes in the player provide a wide screen experience, picture in picture and what I like to call the 'Elvis' mode which lets you go into a control room and watch 4 events at one. This is couple with commentary integration and a rich interactive navigation structure that lets truly see how much content is available.

There are three ingredients that were necessary to make this happen. One was a business rationale and way to monetize this experience. Truthfully this is where the regulatory structure of broadcasting and business models have work that must continue and it's also where existing online models fall short. The cost of the infrastructure and bandwidth and the regulatory environment of broadcast rights have been historical barriers. More cost effective technology and new service-focused advertising scenarios are what rationalized this effort for NBC.

The second was the technology that can make it happen. In this particular case NBC chose to use Silverlight because it was the most cost effective and scalable media presentation technology that could be used for this event. Silverlight made what NBC was attempting to do possible where just a year a ago it wouldn't have been possible from a cost and scalability perspective. Just like Tivo changed how consumers consume and watch traditional broadcasting I think Silverlight has the ability to change how we consume content as a connected social community online.

Finally, NBC focused on the experience and brought the 'long tail' of the Olympics to consumers. Gymnastics clubs across the US for example can now see everything that occurs at the Olympics, from training and trials and warm-ups to the entire event without having it crosscut with other competing events.

If you want to see the Olympics and everything that makes it a truly breathtaking event check it out at http://www.nbcolympics.com/video/

If you like what NBC is doing let them know about it at feedback@nbcolympics.com

Work at Yahoo!? Read this.

(Update. Per usual Henry Blodget over at Silicon Alley Insider have an interesting perspective on this deal. See here and here. I think the fact that people are missing in all this commentary is that the ground work has already been laid with cloud computing and Windows and Office strategies within Microsoft. See Ray Ozzie's comments at least years MIX Keynote for a perspective on this. Perhaps we're simply not communicating these strategies clearly enough but to presume we'll always take a defensive posture relative to our long term growth is an incorrect generalization.)

(Update II. A few typos and thoughts have been edited for clarity.)

So, my tenure at Microsoft has been a little over 16 months. I've been in a somewhat unique position in that I'm based in the field, far from corp. and I spend most of my days working with customers, partners we're trying to develop and the design community. Along the way the though I've had a chance to get intimate with the corporate politics of Microsoft (and yes, they do exist) and I've also had some chances to interact globally with my peers and product and marketing teams from just about every business group (media and entertainment being the exception). My thoughts here are based on publicly available information and my own opinions and while I'm not going to spell everything out here hopefully I'll provide some context to folks to come to their own conclusions about what might be one of the biggest bets in technology history.

When I told many of my friends and peers that  I was going to work for Microsoft, after talking to numerous companies, two of which where Yahoo and Avenue A | Razorfish--so I'm aware of the irony : ) most people thought I was nuts. And truth be told, it was a bit nutty. Nobody thought a company like Microsoft had even a little chance of trying to build a new market and ecosystem around design. I took solace in the fact that a lot of other smart people chose to take the same risks that I did, including folks like Forest Key (who did it far sooner than the rest of us) and folks like Jon Harris, Scott Barnes, Shane Morris, August de los Reyes, Eric Zocher, Doug Olson and Steve Guttman and too many others to name here.

I also told folks privately and semi-publicly two things. One was that if I do my job correctly I'll be on the verge of getting fired from time to time (only happened once so far so I need to push a bit more : ). Two is that people that hate or love Microsoft are going to see a great show and that Microsoft's relevance or lack of it is going to play out in the next two years. Depending on what side of the fence you sit on this idea of a Yahoo! and Microsoft sounds like either an act of desperation, a Hail Mary, or a brilliant strategic move (It's a bit of all three).

Let me highlight some thoughts that I think people don't see that are equally important and are precursors to some of the big bets Microsoft is making.

The first thing I'd suggest that is that we go back and look at the decision to hire Ray Ozzie. Culturally, Ray brings a very different and powerful perspective to Microsoft. The next guy I'd look at is Bill Buxton, in our research group, one of the foremost designers in technology today that is relevant in the trends of design and adept at driving cultural change in big and complex businesses. These guys along with many others, like Scott Guthrie, are architects of many of the ways Microsoft wants to move forward. So when you look at software plus services and things like Silverlight and touch computing I think we can agree that we've got some of the best talent in the business thinking about these problems.

If we look at the most profitable parts of our business some dramatic changes are occurring there as well. Steven Sinofsky culturally brings a very different approach to product development and engineering than has historically been available at Microsoft. I won't get into the perception versus reality conundrums that confound Vista here but don't presume Microsoft didn't learn a lot and make changes based on what happened with the Vista development cycle. Steve is also supported by the very capable Julie Larson-Green.

But Microsoft also (often to the disappointment of many long-time staffers) make the choice to go outside of the company for key roles too. This has notably happened in four instances that are important. Three are recent and one has been here longer term.

Kevin Turner has the expertise and the drive to make Microsoft a leaner organization, expect to see his influence continue--folks that are tasked with this aren't also popular but I would say that Kevin is one of the key architects in making much of the MS business leaner and more efficient and more in tune with our customers needs. I've had the opportunity to meet him personally and he's an intense and intimidating guy that is probably one of the smartest execs. I've had the pleasure of personally spending time with, he's a doer and he hires others (like the recent Tony Scott) that work hard to understand what are customers want and how they feel when they use our technology.

We've also got guys like J Allard that literally has one of the hardest jobs in Microsoft, building new business from scratch that can captivate and delight consumers, we're finally seeing that pay off in a very strategic way with the ascension of Xbox 360 and Xbox live in a world where entertainment is beginning to become synonymous with gaming.

Three other recent hires only augment this. One is the guys that heads up sales for north America, a guy named Robert Youngjohns, his perspective is exactly what is needed at Microsoft and when I think of his background and veteran Dan'l Lewin's and what a Yahoo!/Microsoft company look's like I start to get very excited about the possibilities.

But the hire that's most interesting to me is Stephen Elop, who is going to run our office group. His the former head of Macromedia and even the most jaded observer can intuit that his hire represents that we are looking forward and not backward in how we grow our businesses.

All of this activity indicates to me the fact the Microsoft is still a company that is capable of inspiring and hiring great talent that doesn't simply drink kool-aid and is still inspired by Microsoft's ability to change the world. It's easy to get lost in sites like mini-Microsoft or the common ethos of the valley about Microsoft and presume that's all there is. As we ponder what a merger like this could mean if it goes forward don't sell yourself short on the possibilities or positives outcomes.

I've detailed my own thoughts on what exciting to me about this effort.

• An opportunity to demonstrate Microsoft's continuing commitment to interoperability with open source.
• The opportunity to learn a lot from Yahoo's formidable UI and engineering talent and product development teams. We've got some good folks too : ).
• Yahoo's great field sales team and international expertise. I think the integration of this team with some of our own will create some formidable competitive dynamics in this space.

There are some hurdles though too and I think from an integration perspective the most challenging aspect will be making sure we remove those layers of middle-management that are beholden to the status quo on both sides. So if you're a hater on either side of the fence about this then it's probably time to start thinking about a new gig.

New and real competitive challenges seem to excite and get Microsoft executing in the right ways for the right reasons, so those of you that are worried about Microsoft technology and practices winning the day, every day are probably operating under the wrong assumptions. Microsoft wants to grow Yahoo and it's value to it's customers, not squash it and I think you'll find the cultural enthusiasm to make sure that happens at all levels of the company.

Technorati Tags: Yahoo,Culture Clash,Culture

PhizzPop Design Challenge Chicago: See Dave Armano of Logic + Emotion

Technorati Tags: David Armano, Logic + Emotion, Critical Mass

David Armano of Logic + Emotion (and Critical Mass) will be joining us for a 20 minute talk to warm up the crowd at the PhizzPop Design Challenge in Chicago.

Considered a part of the Power 150 by Ad Age (#26 actually) David Armano is one of the leading thinkers on the convergence of social media, marketing, advertising and what it all means about how we need to work together. Dave will share some insights on this as the competing Chicago teams put the final touches on their presentations.

So, what are you waiting for? Get over to PhizzPop now and Register!

http://designchallenge.phizzpop.com/

Dave's topic? Why digital agencies and design of course! Dave will present an updated overview on what emerging trends in design thinking and practice mean for folks that practice design in the enterprise or the agency. Check out some of Dave's thought on this concept below clicking the picture to visit SlideShare.

Please note that reservations are filling up fast. If you get a note saying you're on the waitlist sit tight! It probably means we just have to ensure we can get you in the door to keep the fire marshal happy and that alas is a manual process.

If you register by Tuesday night and don't get a confirmation that 'you're in' by Wednesday drop us a line at pdchelp@microsoft.com

Speaking in Chicago, September 24th, 2007 on Marketing's Perfect Storm.

Critical Mass is introducing a new series of events called "Spark Sessions". The first one is next week and I've been asked to share my perspective on the topic above which is (even if people don't admit it publicly) on the top of every agencies mind, which is how to we handle and integrate traditional media with emerging media and develop relevant, integrated and branding experiences and conversations with consumers. Click the image below to sign up.

Thought Leadership by Design: Portable Inspiration

Friend and colleague Nate Burgos has curated some of the more recent design wisdom that has been erupting in the blogosphere over the past few years. This isn't a book that will teach you how to design but it will remind and inspire you about what it's good for across categories from Authenticity to Value and all that lies in between. Much like the work by Seth Godin I'm considering buy a few boxes of this to give out to friends and family.

A few of the quotes that stick with me.

"It is much easier to be critical than to be correct."  --Benjamin Disraeli

"Always design a thing by considering it in its next larger context--a chair in the room, a room in a house, a house in an environment, an environment in a city plan."  --Eliel Saarinen

"When I refer to design thinkers, I'm referring to individuals who have mastered the design process and are applying that methodology with the goal of becoming more innovative and better need identifiers and problem solvers."  --David Kelly

Technorati tags: Nate Burgos, Thought Leadership on Design, Disraeli, Saarinen, Kelly, IDEO

On Craplets

Because I'm supposed to be some kind of tech geek super hero at Microsoft they set me up with some nice equipment when I started working back in September. I got a tablet pc (Toshiba M400) and my choice of one additional laptop that was my choice. I settled on Sony VAIO (SZ390P) because it was super light and super powerful for the form factor. (Although if Apple put out a MacBook Pro with similar specs in a 13' I'd look at that too as I could run OSX, Vista and Ubuntu and that is some serious tech geek Nirvana.)

Anyhoo, it meant my recently purchased Dell Dimension E510 wasn't getting much use. I finally go around to upgrading it yesterday to Vista and the process actually worked perfectly, without a hitch. Vista downloaded and updated all the drivers I needed and the only thing I needed to select was which virus software I wanted to use. I then installed office and the process was just the same. It reminded me of other experiences with other operating systems that I won't mention--but suffice to say, it proved to me that Vista and Windows is perfectly capable of 'just working.'

Even I was slightly surprised and I think I know why. Much of our software that gets put in with Windows disrupts the experience of an install or an upgrade, especially if drivers aren't supported or if driver updates are sandwiched in with a lot of other software that isn't very useful or just plain awful. This applications are aptly called craplets.

While the infinite hardware possibilities of Windows will make it impossible to better the experience that one can get on an integrated software and hardware set we should be able to be much better than we are now or even match it.

The fact that I can take a clean copy of Vista and Office and put it on machine shows this is possible, today, right now. It's disappointing to me that other computer manufacturers don't look at the experience that is possible with other operating systems that don't load up the craplets.

My Sony is a beautiful machine, I love the way it looks and the way it travels, but there is so much junk software that came with it that it disrupts what should be a much better computing experience. Sadly, this is probably true of a lot of computer manufacturers. If I were Dell, HP or others I'd be paying attention to this. I'd even be a pragmatist and say that I understand the economics of why craplets exist and I'd give consumers the option to pay a premium to not get them or at least give them an easy way to deinstall them and get a 'core' system. Doing this would show that they realize people aren't buying a box but that they are engaging in an experience with their products that will allow them to create emotional connections with their customers. This is what makes the world go around these days.

Vista is a massive improvement in the 'delight' and 'wow' I can get from using Windows compared with previous versions. Matched with beautiful hardware it can make for a superlative computer experience. But in this world craplets have got to go.

Where is technology looking?

Some random thoughts I've been playing with this week. It's very common to see in the blogosphere the lamination that Microsoft is trying to "do too much" (and I'm paraphrasing politely here). This is usually following up by question of "why are they trying to do so much, they must be greedy and evil and that motivates every thing they do" and "they simply can't stand seeing someone else win."

Now as Microsoft is a public company we have an obligation to shareholders and employees to grow our business. Of course the bigger you get the harder it gets to do this. As others have noted despite Microsoft's languishing stock price Microsoft has grown at a rate of about 4 billion dollars a year over the past few years despite these challenges. Another way to look at it is like this. The software market is currently defined as about a 131 billion dollar business. Microsoft derives about 54 billion of that and is probably getting about half the profit that is derived from the industry as a whole. Do I wish our stock was doing a little better based on that performance? Sure I do, but all in all so far, these are good problems to have.

Now let's look at a specific part of the advertising business called Web search. Google has about 55.8% of this business versus 22.7% for Yahoo and 9.6% for Microsoft and the rest is divided among everyone else. Web search is a small (albeit very important and visible part) of a much bigger business though, which is advertising. The advertising market is about a 573 billion dollar business. So, just like the rest of the technology world Microsoft needs to be looking at that business as it searches for growth.

I'll submit that Microsoft is doing exactly what it should be doing right now, which is building an ecosystem or platform with it's technology that can allow it to capture a piece of that business. What do you need for that? For starters you need a way to touch all of the mediums that play in that world. That includes the digital devices that advertising is designed for--things like the Web, mobile, the desktop, television, IPTV, gaming platforms and TNBT (The Next Big Thing). It includes the systems for media buying, distribution and management of those assets. It includes the tooling and platforms that let people use skills across a continuum to create experiences that can be supported by the advertising model. Finally, it includes concepts like sustainability, community building, co-creation and audience-generated content.

So if you're Microsoft and well on your way to the next phase of your cultural existence what would you do? Focus on an industry where you already dominate and where the market seems to think you've added all the economic value you can or look elsewhere to leverage, supplement and advance that knowledge into other industries that can benefit from it?

Everything is a part of a bigger picture at any company that gets big. Our foray into designer tools and cross-browser platforms that can integrate across the spectrum of our services platforms are the big bets that any company needs to make to play effectively in the world of advertising and tackle the new challenges that customers and business face than can address the entire customer experience and value chain. Do we want to be competitive and win in these new markets? Sure. But it's an awful big market and there's room for a lot of success and healthy competition among the technology and advertising ecosystem.

Of course advertising is only part of this picture and the big bets that Microsoft is making. In future posts we'll look at other areas that require focus.