Creative Class

A headline on the Wall Street Journal’s Digits blog blasts: “Can Apple Maintain Status as Religion of the ‘Creative Class’?”

Apple’s core following has traditionally been the creative class. They are graphic designers and artists, and they constitute a “church” of sorts… Apple in a sense cultivated this “underdog” or creative-class status to successfully market its products. Consider Apple’s “Think Different” ad campaign, or its ubiquitous Apple vs. PC ads featuring a young, hip Justin Long… With the release of the iPad, the question is whether Apple can maintain this “underdog” or special status… Still, the iPad is a new kind of product for Apple, one geared not so much to its traditional creative class or “inner church,” as to a general audience merely interested in viewing media and not creating it.

(more…)

We all know the power of an Apple or a Google to create new business models and generate massive new wealth. But, long ago, the great economist Joseph Schumpeter argued that the formation of new entrepreneurs lies behind the great “gales of creative destruction” which set in place new firms and industries and revolutionize old ones.

The last couple of days, we’ve looked at how class effects economic growth and innovation. We now look at the relationship between class and entrepreneurship. In the graphs below, Charlotta Mellander compares countries’ performance on the Global Entrepreneurship Index developed by economist Zoltan Acs to shares of the creative class and working class.

Again, the results speak for themselves. Entrepreneurial countries are creative class countries. Those with high percentages of the creative class have higher scores on the Global Entrepreneurship Index.

The opposite is true of countries with a large share of the working class. Their scores on the Global Entrepreneurship Index are considerably lower.

Source of all graphics: Martin Prosperity Institute

As originally published in BusinessWeek, this is the fourth installment in a series about decision-making and design. Part One. Part Two. Part Three.

Without Apple’s willingness to keep modifying and enhancing the iPod, even though it was already successful, we wouldn’t have the marvelous current manifestation or the likely further enhancements that we may not yet be able to contemplate.

It’s uncommon for corporate decisions to have such a smooth and steady enhancement path after deployment. Rather, it’s more likely to be seen as a sign of failure rather than success if a decision is revisited and altered.

In summary, great design is characterized by deep user understanding, visualization of creative resolution of tensions, collaborative prototyping to enhance solutions, and continuous modification and enhancement after launch. The result is design solutions that are easy for users to adopt, delightful for them to use, and likely to get better over time.

Corporate decisions, in contrast, are likely to be driven more by producer desires than user needs, accepting of unpleasant trade-offs generated without intensive involvement of users, and applied inflexibly. As a result, decisions tend to take a long time to make, often unravel, take expensive and time-consuming “buy-in” procedures, and are lower quality than they could be with greater user understanding and input.

With the recent uproar about the redesign of Facebook, is the modification and improvement of existing designs always a good thing?

Read this story in its entirety at BusinessWeek.com

As originally published in BusinessWeek, this is the third installment in a series about decision-making and design. Part One. Part Two.

Because companies are hierarchical, decision-makers tend to put the needs of the decision’s producer ahead of the needs of the decision’s users. This isn’t unlike the stereotypical architect who designs a house that makes him happy rather than makes the client happy. The great corporate decision designer, like the great architect, instead would get creative about how the user needs could be integrated into a creative solution.

In addition, corporate decisions tend not to be elegant and intuitive. They tend to be abstract – “We are going to be customer-centric” or “Quality is job one.” Or they tend to be internally inconsistent – “We’re reorganizing and downsizing in order to provide better customer service.” This is yet another reason for the many implementation task forces and “buy-in” sessions. These task forces are the human equivalent of a 500-page user manual for a VCR. And “buy-in” sessions are the human equivalent of Soviet indoctrination camps.

Great designers use rapid prototyping to refine their design before locking in on a solution. Rather than work on one design, fall in love with it, and jam it down the throats of users, the great designer engages users in a collaborative process of testing and refining to help the design rapidly evolve to the point where it delights users. Involving users in prototyping can lead to a solution the designer couldn’t have otherwise contemplated.

INVALUABLE SOURCES. In corporations, most decisions are never prototyped. At most, the decision-makers float a trial balloon to see whether a firestorm will ensue. And if it does, the decision is taken back to be privately reworked and floated again later.

Users typically aren’t involved. Why? To make sure the decision process doesn’t “get out of control.” As a consequence, the decision designer cuts herself off from an invaluable source of design ideas and enhancements, and is much less likely to produce an elegant and intuitive decision design.

Finally, great designers continue to modify and enhance the design after it’s in use rather than insisting that it be cast in stone. For many, Apple’s iPod is the current poster child for perfect design – elegant, intuitive, delightful, economical, etc. However the iPod went through a lengthy period of profound design changes after its first launch to become the “instant success” that everybody thinks it is (as chronicled by former chief scientist for Alias Wavefront Bill Buxton in a book on design).

What recent products do you consider as having perfect design? Does Apple still lead the pack?

In every single speech I make, I say Toyota, not Google or Apple, is the single best example of the creative company.  Nearly 15 years ago, I wrote a book on this with Martin Kenney. James Surowiecki makes the case ever more succinctly in his latest New Yorker column:

But if Toyota doesn’t look like an innovative
company it’s only because our definition of innovation—cool new
products and technological breakthroughs, by Steve Jobs-like
visionaries—is far too narrow. Toyota’s innovations, by contrast, have
focussed on process rather than on product, on the factory floor rather
than on the showroom. That has made those innovations hard to see. But
it hasn’t made them any less powerful.

At the core of the company’s success is the Toyota Production
System, which took shape in the years after the Second World War, when
Japan was literally rebuilding itself, and capital and equipment were
hard to come by. A Toyota engineer named Taiichi Ohno turned necessity
into virtue, coming up with a system to get as much as possible out of
every part, every machine, and every worker. The principles were
simple, even obvious—do away with waste, have parts arrive precisely
when workers need them, fix problems as soon as they arise. And they
weren’t even entirely new—Ohno himself cited Henry Ford and American
supermarkets as inspirations. But what Toyota has done, better than any
other manufacturing company, is turn principle into practice. In some
cases, it has done so with inventions, like the andon cord, which any worker can pull to stop the assembly line if he notices a problem, or kanban,
a card system that allows workers to signal when new parts are needed.
In other cases, it has done so by reorganizing factory floors and
workspaces in order to allow for a freer and easier flow of parts and
products. Most innovation focusses on what gets made. Toyota reinvented
how things got made, which enabled it to build cars faster and with
less labor than American companies.

But there’s an enigma to the Toyota Production System: although the
system has been widely copied, Toyota has kept its edge over its
competitors. Toyota opens its facilities to tours, and even embarked on
a joint venture with G.M. designed, in part, to help G.M. improve its
own production system. Over the years, more than three thousand books
and articles have analyzed how the company works, and things like andon
systems are now common sights on factory floors. The diffusion of
Toyota’s concepts has had a real effect; the auto industry as a whole
is far more productive than it used to be. So how has Toyota stayed
ahead of the pack?

The answer has a lot to do with another distinctive element of
Toyota’s approach: defining innovation as an incremental process, in
which the goal is not to make huge, sudden leaps but, rather, to make
things better on a daily basis. (The principle is often known by its
Japanese name, kaizen—continuous improvement.) Instead of
trying to throw long touchdown passes, as it were, Toyota moves down
the field by means of short and steady gains. And so it rejects the
idea that innovation is the province of an elect few; instead, it’s
taken to be an everyday task for which everyone is responsible.
According to Matthew E. May, the author of a book about the company
called “The Elegant Solution,” Toyota implements a million new ideas a
year, and most of them come from ordinary workers. (Japanese companies
get a hundred times as many suggestions from their workers as U.S.
companies do.) Most of these ideas are small—making parts on a shelf
easier to reach, say—and not all of them work. But cumulatively, every
day, Toyota knows a little more, and does things a little

They’re also phenomenally difficult to duplicate. In
part, this is because most companies are still organized in a very
top-down manner, and have a hard time handing responsibility to
front-line workers. But it’s also because the fundamental ethos of kaizen—slow
and steady improvement—runs counter to the way that most companies
think about change. Corporations hope that the right concept will turn
things around overnight. This is what you might call the crash-diet
approach: starve yourself for a few days and you’ll be thin for life.
The Toyota approach is more like a regular, sustained diet—less
immediately dramatic but, as everyone knows, much harder to sustain. In
the nineteen-nineties, a McKinsey study of companies that had put
quality-improvement programs in place found that two-thirds abandoned
them as failures. Toyota’s innovative methods may seem mundane, but
their sheer relentlessness defeats many companies. That’s why Toyota
can afford to hide in plain sight: it knows the system is easy to
understand but hard to follow.