The Hub Cool News

Wrap Shrink

saran-wrapSaran Wrap downgraded its brand experience because it was the right thing to do, writes Fisk Johnson, chief executive officer of SC Johnson in The Harvard Business Review (April 2015). At issue was the presence of polyvinylidene chloride (PVDC) which provides Saran Wrap with two of its key benefits: “an impenetrable barrier to odor” and “superior microwavability.” The problem is that “when materials containing chlorine, such as PVC (polyvinyl chloride), and PVDC end up in municipal incinerators … they may release toxic chemicals into the environment.”

PVC was also present in Saran Wrap’s packaging, which was easy enough to change. Creating a PVDC-free wrap was another matter. As Fisk writes: “To provide the odor barrier and microwavability of the original would require a multilayer film,” about the thickness of trash bags. Ultimately, the closest alternative was “less sticky, less effective at preserving foods’ freshness, and a lower-quality product overall.” Fisk decided to replace Saran Wrap with the inferior product, which has since resulted in a significant drop in sales.

The CEO cites something his great-grandfather said in 1927: “The goodwill of people is the only enduring thing in any business. The rest is shadow.” He also recalls that his father had made good on that ethos by banning ozone-damaging CFCs from aerosol products in the 1970s. Fisk sees himself as the guardian of his family’s “good name” and “a legacy built on the hard work of four generations” before him. His Saran Wrap decision, he says provides “a surer sense of who we are as a company and what we want SC Johnson to represent.”

House of Cards

business-card“Attempts to reinvent business cards for the digital age have gotten nowhere,” reports The Economist (3/14/15). One might think that in this digital age we would now be exchanging business information with the tap of a smartphone. This ignores that business cards date back at least to 15th century China, and apparently old traditions die hard. Indeed: “Nothing will provoke more discussion at a board meeting than the design of the company’s business cards.” Some companies take pride in making brand experiences out of their cards.

At Lego, for example, employees “give out miniature plastic figures with their contact details stamped on them. McDonald’s business cards are shaped like a portion of fries. Bon Vivant, a Brazilian cheesemonger, uses a miniature cheese-grater as its card. A Canadian divorce lawyer once gave out cards that can be torn in two — one half for each of the feuding spouses … That business cards are thriving in a digital age is a forceful reminder that there is much about business that is timeless.”

In Asia, cradle of the tradition, business cards “are something of an obsession,” even “semi-sacred objects.” Japanese businesspeople “make the exchange of cards as elaborate as a tea ceremony” and in China, even “nursery school children carry cards not only with their own contact details, but also with the job descriptions of their parents and even grandparents.” In any case, the “trust-building process,” seems to be more important than ever, and in an era of innovation and disruption, certain customs appear to be exempt.

Old Forester

old-foresterBrown-Forman hopes the whiskey boom will help revive its founding brand, reports Tripp Mickle in The Wall Street Journal (3/17/15). That brand is not Jack Daniel’s — which the company acquired in 1956 and is flying high. It is Old Forester, a bourbon that dates back to 1870 but has been sidelined amid whiskey’s recent revival. “We’re rolling the dice on a brand that hadn’t had much wind at its back for a while,” says Campbell Brown, a descendant of Brown-Forman founder and Old Forester creator George Garvin Brown.

At its peak, in 1972, Old Forester moved one million cases, but last year just 112,000 cases were sold. “We want to get back over 500,000 cases pretty fast,” says Lawson Whiting, Brown-Forman’s chief brands and strategy officer. Some $20 million will be invested in the brand to boost its “retro-appeal,” says Lawson. This will go towards “point-of-sale materials at retail promotions at bars and digital marketing.” An Old Forester Mint Julep drink will also be the “official drink of the Kentucky Derby” this year.

Brown-Forman will also open a distillery in Louisville next year, “the first in Kentucky where visitors can watch employees make oak barrels and char them with fire, a critical step in the bourbon-making process.” Currently, “almost half of Old Forester sales” occur in Kentucky and Alabama, but plans are to “target people in their twenties in urban markets like New York, Chicago and San Francisco,” in bars with newly popular cocktails like the Old Fashioned. Much of Old Forester’s current growth has been at restaurants and bars.

Aldi & Lidl

aldiA pair of German retailers have a plan for global domination, reports The Economist (3/14/15). The retailers are “Aldi and Lidl, two German chains founded in 1946 and 1973, respectively. They are now the world’s biggest ‘deep discount’ grocers, offering mostly their own brands of goods and almost no premium-priced products. As mainstream supermarket groups contract, in Europe especially, the German duo continue to eat up market share.” Both are achieving success by “patiently and systematically advancing in their chosen territories.”

Aldi “seeks out countries where returns on groceries are significantly higher than global averages,” says former Aldi UK head Paul Foley. This is typically where “the local market is dominated by a few giants.” The approach is to grow “slowly and organically,” and, as Paul puts it: “suck the profitability out of the industry in favor of the consumer.” Rather than expanding into a large number of countries, the idea is to concentrate on a few, particularly Britain, where together the chains have about 15 percent of the market.

In the United States, Lidl has deferred its entry until 2018. Aldi currently has about 1,375 stores under its own name and another 435 under its Trader Joe’s banner. Plans are to add another “650 Aldi-branded stores” in the US as part of a “$3 billion expansion plan.” By comparison, Carrefour has left “19 foreign markets,” Tesco “lost billions” in the US and Walmart withdrew from Germany and South Korea. One weak spot for Aldi and Lidl might be online, as “neither has yet developed an internet-based sales channel.”

Switch

switchA new generation of technology is reinventing the phone call, reports Shira Ovide in The Wall Street Journal (3/13/15). The issue is that while email can be efficient, it also tends eliminate context and collaboration. “You’ve distilled all the waste out of the phone conversation and what’s left are these really important times when you need to talk to someone in real time, and get some emotion and back-and-forth,” says Craig Walker, founder of Switch, a technology platform that replaces traditional telephone hardware with a web-based, subscription service.

Switch enables users to “dial voice calls via computer, switch devices mid-call, and see documents exchanged with the person on the other end of the line.” It can also ring “conference participants automatically at the appointed time, making 800 numbers and PINS unnecessary.” In concept, this is not new, as Microsoft and others have provided similar capabilities. One difference is that offerings like Switch tend to provide greater functionality at lower cost, “and don’t rely on company technicians.”

The technology is similar to that used by Uber, the ridesharing service, which uses Twilio to power “automated text messages that let customers know a driver is waiting,” for example. At Weather Co., meanwhile, Switch is seen as being “less about cost than about maximizing productivity.” Chief Information and Technology Officer Bryson Koehler comments: “My goal for the organization has been to shift the way we work and really empower our company and our people to work in a mobile, agile, collaborative, next-generation way.”

Bear Market

beanie-babyTy Warner is like “some Steve Jobs from a parallel universe ruled by satirists,” writes Daniel Akst in a Wall Street Journal review of The Great Beanie Baby Bubble by Zac Bissonnette (3/7/15). Ty is the founder of Ty, Inc., the toy company best known for Beanie Babies. Perfectionism is common to both men, along with a strong sense of aesthetics. Ty was “forever tinkering with designs to make the toys more appealing, obsessing over each model’s fabric and pose and the distance between the eyes.”

Both men pursued similar retail strategies, and had a keen understanding of “the importance of the retail environment.” Similar to Apple, Ty kept Beanie Babies “out of bins and big-box stores.” Of course, Beanie Babies never rose above the level of a fad, but during its run it was a phenomenon that “appealed to people aesthetically and emotionally,” not unlike the infamous “Dutch tulip mania of the 17th century.” Its heyday, in the mid/late ‘90s, Beanie Babies were well aligned with an era of peace, prosperity and over-parenting.

The strategy was a mix of collectibility and scarcity, which Ty apparently stumbled upon “when a beloved Beanie Baby had succumbed to a production problem” and “salesmen pretended that it had actually been purposefully ‘retired,’ the better to instill urgency in buyers … A toy retirement announcement could send the price of a Beanie Baby soaring.” At one point, in 1998, “a single rare Beanie Baby specimen sold for $10,000.” The bubble burst in 1999, after Ty introduced “too many Beanie Babies.”

Aetna Mantra

sohamA near-death experience led Aetna’s CEO to create a culture of yoga and meditation, reports David Gelles in The New York Times (3/1/15). Mark Bertolini was given last rites after skiing into a tree and falling 30 feet into a ravine. He survived, but no longer has use of his left arm, which he says still feels as if it’s being burned “with a torch all day long.” Unable to continue his daily jogging regimen, he turned to yoga and meditation. Where drugs didn’t help ease his pain, yoga’s “vigorous stretching” and meditation’s “mindfulness” provided relief.

Amazed by this, he began “leading brief meditations in meetings with his executive team,” and then offered “yoga and mindfulness classes to employees.” Mark found that “employees who stuck with either yoga or mindfulness reported significant reduction in perceived stress and sleep difficulties.” They also logged increased productivity. In 2012, “he noticed something surprising: Health care costs had fallen … paid medical claims per employee were down 7.3%.” Those costs has since increased, but have held steady at 3% lower than before.

Flush with this success, Mark “announced that Aetna was increasing its minimum wage in the United States to $16 an hour, from $12 … and Aetna would also reduce their out-of-pocket health care costs.” “If we can create a healthier you, we can create a healthier world and healthier company,” Mark told his employees. His “journey of personal healing is now about improving the physical, mental and spiritual health of his nearly 50,000 employees and tens of millions of customers.” “It’s made me question what I do … and how I treat people,” he says.

Blithe Spirit

spiritA bad brand experience seems to be Spirit Airline‘s competitive advantage, reports Scott McCartney in The Wall Street Journal (2/26/15). At the core of the airline’s offering is a bait-and-switch plan that advertises low air fares that are then raised via an array of fees for extras. In this case, extras can include an in-flight drink of water. They also include printing a boarding pass, using a credit card, and speaking with an agent by phone. “There’s no fee to recline the thin seats — they don’t recline because legroom is so cramped.”

This works “because other airlines have raised prices so much.” Spirit “is expanding nationwide” and “increased its capacity a whopping 19% last year.” Spirit CEO Ben Baldanza makes no apologies. “No one goes to Chick-fil-A and complains they can’t get a burger,” he says. “And people shouldn’t come to Spirit if they want lots of legroom.” He also says he expects people to complain about all of the extra fees. “Our complaints will be higher than the rest of the industry. We understand that,” he says.

The Spirit gambit obviously plays better with some fliers than with others. “They attract people with cheap flights and then overcharge for everything,” says Emily Alayyan. “If you know you’re taking Spirit, be ready for an awful ride.” Still, Emily has not been able to resist flying Spirit. Susana Farias, meanwhile, says she’s “very, very happy with Spirit” because the low fares enable her to travel more frequently. Bottom line: “The average ticket on Spirit is $73 each way, and passengers pay, on average, another $55 in fees and in-flight purchases.”

New Coke

new-cookeNew Coke’s champion said his greatest failures happened when he lost sight of the bull, reports Stephanie Strom in The New York Times (2/25/15). When the late Donald R. Keough, "who led Coca-Cola through the disastrous introduction of New Coke in 1985," said "bull," he meant it literally. "When I was 15 or 16 years old, I got a job buying bulls to ship back to processing plants," he once told The Times. On his first day, after overpaying, his boss chastised him, saying: "Concentrate on the bull, not on the language of selling."

Following the popular uproar that followed New Coke’s rollout, it was apparent Mr. Keough had indeed forgotten the bull. "All the time and money and skill that we poured into consumer research could not reveal the depth of feeling for the original taste of Coca-Cola," he said. After noting that cynics accused Coke of introducing a new flavor profile to spark demand for the original formula, he commented: "The truth is that we are not that dumb and we are not that smart." Old Coke — re-dubbed Classic Coke — was off the shelves for "just ten weeks."

Mr. Keough wrote a book called The Ten Commandments for Business Failure," in which he recounted his most famous disaster. One of the commandments was: Assume infallibility." As he told The Times in 2008 : "The word ‘success’ has always made me nervous, because I believe built into that word are a couple of viruses — arrogance and complacency — and left unchecked they can ensure failure." At one point, he also "suggested that his tombstone should read: ‘He’s not that dumb and he’s not that smart’." Donald Keough was 88.

Grace Thomas

grace-thomasAmerican Girl’s latest doll is designed to spark the entrepreneurial spirit, reports Ruth Simon in The Wall Street Journal (2/12/15). As with all American Girl dolls, this one has a name — Grace Thomas. She’s nine years old, and "is a budding bakery owner." Julia Prohaska of American Girl explains: "Marrying the idea of girls’ high interest in baking and cooking with entrepreneurialism was just a natural fit." American Girl is owned by Mattel, which itself has "rolled out entrepreneur Barbie, with her smartphone, tablet and briefcase."

Ted Ganchiff of the Science & Entrepreneurship Exchange, thinks the time is right: "We are creating generations of people who are terrified to make a mistake," he says. The new American Girl doll "plays out in three related books … The story of Grace … illustrates what’s needed to run a bakery, such a registering the business and obtaining a license … the books explain that launching a business can be ‘messy and overwhelming’" but tries to offer practical advice, like buying supplies in bulk, for instance.

According to Ewing Marion Kauffman Foundation, "women have opened roughly 200,000 new businesses a month over the past five years … Men, by contrast, have opened approximately 325,000 new businesses a month during the same time period." Inspiring more girls to start businesses doesn’t necessarily come cheap, though. In addition to the accompanying Grace Thomas books, American Girl sells "a miniature bakery with make-believe ingredients" for $500. The Grace Thomas doll itself goes for $120.

The Big McFix

ronald-mcdonaldMcDonald’s former CMO Larry Light says the chain’s problems can be fixed. Writing in The Wall Street Journal (2/11/15), Larry notes that McDonald’s recovered from similar challenges during his tenure, back in 2002. The turnaround, he says, "took less than a year to show results." The key was the so-called "Plan to Win," which "aligned the entire organization to execute ‘the right actions in the right way to achieve the right results.’ The basis for it was a laser focus on the customer," built from the inside out.

"Customer focus is important," Larry writes, "but employees come first. In 2003, we invested in an internal marketing effort to re-build employee pride," gaining "internal alignment across 119 countries." "We launched the new advertising approach internally, reaching out to about 1.5 million employees before the marketing was launched externally." Rebuilding trust was essential, and achieved, in part, through Paul Newman’s endorsement of its salads. Relevance is also critical, and today that is tightly linked to "changes in attitudes toward food."

Transparency matters, but can be a downside if it exposes ingredients "that customers don’t want to eat." "McDonald’s must revive Ray Kroc’s food-quality passion," Larry writes. Service also must be truly fast. Larry thinks McDonald’s should not try to copy Chipotle’s customization unless it can do so without sacrificing speedy service or quality food. And he thinks McDonald’s has been distracted by Chipotle and others that aren’t direct competitors, and needs to re-focus its menu, which today features more than 100 items.

Radio Silence

radioshackThe decline and fall of American leisure time tells the tale of RadioShack’s demise, reports Christopher Mims in The Wall Street Journal (2/9/15). Hard as it is to believe now, in the 1960s, workweeks were growing shorter and Americans had plenty of time on their hands. "Leisure time is opening markets to us," said Charles D. Tandy, who bought RadioShack in 1963, when it had just nine stores. "Everyone’s spare time is our challenge." This began to change in the 1970s, as RadioShack opened "three stores a week."

At the time, "citizens’ band radio hobbyists" drove RadioShack’s growth. This changed in the 1980s, with the rise of personal computers, and RadioShack was an early leader with its TRS-80, for which "Bill Gates himself wrote the operating system." Steve Wozniak bought parts at RadioShack, and "a teenage Michael Dell saw his first PC" at a neighborhood RadioShack. The retailer’s mistake was that it "unwisely decided only to offer its own software on its earliest PCs, and so it was soon eclipsed by Apple and then the IBM PC."

At that point, RadioShack had little choice but to become a consumer electronics retailer — besides, hobbyists were turning their attention from hardware to software. One might think it could have re-gained its footing among today’s DIY crowd, but that’s a niche market: Make Magazine "has a circulation of only about 125,000." RadioShack in many ways is a reflection of America’s "culture of disposable everything," which became dominant precisely because "we no longer have time for anything else."

Iron & Golden

quarter-pounderIron Chef Geoffrey Zakarian has some advice for McDonald’s, reports James B. Stewart in The New York Times (2/5/15). Admitting that he’d never before eaten at a McDonald’s, Geoffrey recently sat down at "a bustling outlet on Manhattan’s Third Avenue." After sampling a chicken wrap, he said: "You can get a much better wrap at Chipotle … McDonald’s should stick with what it does well." If that would be a hamburger, Geoffrey’s verdict wasn’t much better: "Well, it is what it is," he said. He did like the coffee and the fries, though.

At Geoffrey’s Lambs Club, a burger costs $22. "It’s cooked to order, served on a challah bun and comes with hand-cut fries and house-made condiments." He doesn’t suggest that McDonald’s should follow his lead, but rather "talk more about the quality, the source of the ingredients, address the health concerns. I assure you that if they had a great story and a better company culture, this same burger would taste better," he says. Then there’s the matter of the McDonald’s "loud and chaotic" ambiance, with harsh lighting and bright colors.

Karl Backus of Bohlin Cywinski Jackson — which led design of the Apple stores — says the typical McDonald’s "seems to be treating all of us like we’re messy kids … It’s like everything was chosen to be swabbed down." Both Karl and Geoffrey think it’s a matter of focus, in terms of food and ambiance. Ravi Dahr, a Yale professor of management and marketing suggests McDonald’s "needs to rethink all the elements of the value chain that impact the overall customer experience." A McDonald’s spokesperson says such changes are in the works.

Golden Crutch

golden-archesThe gap between a McDonald’s commercial and the actual experience just got wider, suggests Kate Bachelder in The Wall Street Journal (2/4/15). Kate found this out the hard way, while attempting to buy a beloved Egg McMuffin at the McDonald’s in Washington DC’s Union station. Instead of the expected transaction, "an enthusiastic cashier … began clapping and cheering, and the restaurant crew quickly gathered around her and joined in." Kate was confused, and then the cashier said, "You get to pay with lovin’."

In a riff on the restaurant’s long-running "I’m lovin’ it" advertising campaign, McDonald’s is now randomly choosing customers to "Pay with Lovin”" as part of a short-running promotion. You may have caught this during the Super Bowl, which featured a McDonald’s commercial in which "customers who say ‘I love you’ to someone, or perform other feel-good stunts, are rewarded with free food." (video) In Kate’s case, she was asked to pull a slip of paper from a pencil box, which read: "Ask someone to dance."

What "looks touching on television … is less so in real life," says Kate, who "stood there for a mortified second or two, and then the cashier mercifully suggested that we all dance together." The crew "tried to lure cringing customers into forming some kind of conga line." Kate’s advice, as "a McDonald’s customer of long and happy experience," is simple: "It won’t work … McDonald’s," she says, "should dump the ‘love’ mantra and get back to the excellence mantra that made the Egg McMuffin a worldwide phenomenon."

Buckley’s Best

red-wing-peanut-butterWilliam F. Buckley Jr. was the "patron saint" of Red Wing brand peanut butter, reports David Segal in The New York Times (1/14/15). Mr. Buckley developed a passion for peanut butter while in boarding school, as his father would always include a couple of jars of the spread in a bi-weekly care package. Years later, as editor of the National Review, he wrote about peanut butter, identifying Skippy as his favorite brand. (link) Douglas Manly was running a rival brand, Red Wing, at the time, and, on a lark, sent Buckley a jar and a note.

Buckley sampled Red Wing and thought "he had found paradise on earth in a jar with a yellow cap," says Christopher Buckley, a son. So devoted was Buckley to Red Wing that he agreed to speak at a ribbon-cutting ceremony for a new peanut roaster at the company’s plant. Among other things he said that if Red Wing were served at US-Soviet disarmament talks, the peanut butter would cause the Soviets to "give up their assets, communism and Karl Marx." Red Wing thanked him with a lifetime supply, sent every six months, with the label, Buckley’s Best.

Exactly why Buckley preferred Red Wing isn’t known, but Douglas Manly suspects it was because it was fresher than other brands. Ironically, Red Wing was developed as a knock-off of Jif, as a private-label brand. "We worked on it until employees who were part of a taste panel could not tell the difference between Red Wing and Jif," Douglas says. Sadly, the Red Wing plant was acquired and closed by ConAgra in 2013, although ConAgra says it will continue to use the recipe to make the butter for Wegmans, Price Chopper and others.

Fiskars Responsibility

fiskarsA 365 year-old company expects to introduce 245 new types of scissors over two years, reports Sarah Kessler in Fast Company (1/26/15). That company would be Fiskars, the timeframe is 2014 and 2015, and to be precise, "scissors" includes "garden shears, loppers, craft punches and other cutting tools." Seventy-two of the 245 will be "what the company calls ‘new innovations,’" that are more than just incremental or cosmetic changes. Among them is a pair of scissors that "don’t lift fabric," which is really important to those who sew.

Another "new innovation" is a pair of "loppers with pivoting gear and a technology for cutting thick materials." This is important for those who "cut a lot of thick things like burlap and leather," who apparently are growing in numbers thanks to Pinterest. You likely know Fiskars best as makers of those stylish orange-handled scissors (image), introduced in 1967 and now its flagship product. Fiskars’ first variation on that theme was a pair of left-handed scissors, and "after 48 years, it is not out of ideas."

Fiskars is equally persistent about testing its new ideas, having "built what looks like a torture chamber for scissors." One machine "uses a prototype to cut thousands of snips out of a moving roll of paper to test how long it will take for a blade to dull." Another "tries to pull handles off blades to test whether they’re safe." An aquarium-style machine "spews a corrosive mist" to assess rust potential. The engineering team can put "10 years of wear" on a pair of scissors in a single afternoon, and if it survives, it just might be ready for prime time.

Data v. Empathy

starbucks-logoBig data makes us smarter, but also more timid, writes Rich Karlgaard in Forbes (2/9/15). The issue, says Rich, is that we tend to shrink from our instincts for fear the data will prove us wrong. As an example, he cites sportswriter Bill Simmons, who thought he saw signs of decline in LeBron James, but hedged in his analysis because he thought data might say otherwise and didn’t want to be embarrassed. Compare and contrast with, say, Steve Jobs, who went with his instincts, and "knew when to say no to data." Easy for him, apparently.

For others, it’s a fact that data "can show us patterns and opportunities that 99% of businesspeople would miss." If you have a subscription-based business, for instance, you would have "data on customers and their subscription terms." You also have "data on service problems. In theory the two data pools can alert your sales team to which customers might not renew because of a bout of dropped calls near the end of the service contract." Using the data to identify and close gaps in the brand experience has tangible value.

Then there’s Starbucks, a study in contrasts between two Howards — Behar and Schultz — some 15 years ago. Both Howards subscribe Starbucks’ "culture of warmth and belonging where everyone is welcome." However, where Schultz is analytical, Behar is empathetic. Rather than a data dive, Behar simply visited stores and found a cultural disconnect among its employees. His report to Schultz and the Starbucks board: "We don’t need more data. Our problem is simple. Our employees are unhappy. Is that enough data for you?"

Penney Catalogs

jcpenney-catalogRon Johnson wasn’t the only JCPenney CEO who lost customers by misunderstanding them, reports Suzanne Kapner in The Wall Street Journal (1/20/15). Former and current JCPenney CEO Mike Ullman admits he made a mistake by pulling the retailer’s print catalog. That was in 2010, and at the time Mike thought "catalog shoppers would migrate online." He was wrong. "We lost a lot of customers," says Mike. It turned out that shoppers "still like browsing through the decidedly low-tech artifacts of page and ink."

This despite research via retail consultancy Kurt Salmon that says about "44 percent of consumers" would like to be mailed fewer catalogs. However, Salmon’s research also finds that "31 percent of shoppers have a catalog with them when they make a purchase." So, Penney will mail a "120-page book" featuring items from its "home department … to select customers in March." Home goods "have historically been among the top-selling items in Penney’s catalogs." "We are trying to get back those lapsed customers," says Mike.

Restoration Hardware is also embracing catalogs — mailing 13 of them, a total of 3,330 pages — to customers, which created some backlash. Bonobos, founded as an online menswear retailer, sees beauty in pages as well. "We found that the catalog allowed us to tell a fuller narrative about the brand and our products in a way that we were struggling to online," says Bonobos marketing chief Craig Elbert. He also says "catalog customers tend to spend more" and that catalog customers who shop in their bricks stores are their "best customers overall."

Nano Management

tesla-logoTesla and SpaceX founder Elon Musk gets to what’s right by focusing on what’s wrong, reports Mike Ramsey in The Wall Street Journal (1/12/15). "I have OCD on product-related issues," Elon says. "When I see a car or a rocket or spacecraft, I only see what’s wrong. I never see what’s right. It’s not a recipe for happiness." He may not have been referring to his own happiness as much as that of certain "high-level managers" at Tesla, who "quit or were fired" because of Elon’s "insistence on doing things his way."

So intent is Elon Musk on what he calls "nano-management" that he "set up an office in the middle of the factory floor" during the Tesla S launch in 2012. "If you are fighting a battle, it’s way better if you are at the front lines," he says. "A general behind the lines is going to lose." Just three weeks ahead of the delivery of the first car, Elon "demanded that the sedans have larger rear tires because he felt they looked better." This was unrealistic for a number of reasons, but Elon insisted, and the "design change went through without a hitch."

This style doesn’t play well with everyone, but that’s fine with Elon. "He used to say that he only wanted ‘special forces’ working for him," says Ricardo Reyes, Tesla’s media relations head. "No normal people." Supporters say this "relentless perfectionism has steered Tesla to where it is today." His "unwavering determination" helps explain why "investors have flocked to Tesla and shrug off the fact that the auto maker has never made an annual profit." "You take Elon out of the company and the market cap would go down 80%," an analyst says.

Delightful Design

intuit-labsBeautiful design is the organizing principle at Intuit, writes Brad Smith, the company’s CEO, in Harvard Business Review (Jan/Feb 2015). The essence of beautiful design, says Brad, is not simply "ease of use" but also an emotional connection based on "deep customer empathy … how customers feel about our products and whether they take pleasure in using them." Yes, we are talking about financial software — a category not typically thought of as "driven by emotion or design." However, where there’s money involved, inherently there is emotion.

Consider, for example, that "most taxpayers are owed a refund — and for 70% of them, that refund is the single largest check they’ll receive during the year." This insight shifted Intuit’s focus from "the pure functionality of its software" to "the emotional payoff of reducing drudgery and speeding the way to a big windfall." Eventually, this led to development of SnapTax, an app that enabled users "to take photos of their W-2 forms" and "completely prepare and and e-file federal and state returns from their smartphones."

Intuit refers to its brand of design thinking as "design for delight," or D4D, and it is premised on everyone within the organization "thinking about design" — not only of its products but also throughout the organization. "In HR we talked about the overall design of the job application and interview process," Brad writes, while those in the finance department considered how to streamline purchase orders. The path to D4D began in 2007, and the goal is for Intuit to be "considered one of the most design-driven companies in the world" by 2020.