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|1999 Foresight Gathering Leaping the Abyss - Contents|
It's 8:00 AM Wednesday morning, and the beginning of the journey through the DesignShop process. Over several days of intensive setup, the support team has worked magic on a standard, large hotel meeting room-you can still pick out aspects of the old space: the ceiling, the carpet, and parts of the walls are visible.
But the standard "start of conference" ambiance is missing: no lines of chairs and skirted tables (equipped with paper, pens, glasses, and water pitchers) facing an empty podium (equipped with overhead projector) from which wisdom will be dispensed.
The space is now transformed into something entirely different. It's been segmented into a warren of smaller spaces, connected by avenues lined with displays of information. Everywhere you look are intriguing articles, graphics, quotations, even comics-a closer look reveals that they all have some relevance to the broader issues we're here to work on.
Although the chairs, as well as the tables that hold the buffet breakfast, are standard hotel issue, all the other furniture is unusual. It's clearly special. Each piece is mobile-usually wheeled-and esthetically pleasing, often of beautiful woods with flowing lines. Some pieces are unrecognizable. A special stand holding a computer with a World Wide Web link is so attractive that it belongs in a museum of modern art or design. Instead, it's here for our use-just one more piece of an inviting and energizing environment.
On display are various 3D objects: art, puzzles, simple gamesmany of them are, well, toys. This is somewhat shocking-we're here to tackle important company problems, and we're being presented with toys. How can this be necessary or helpful? At this early stage we are asking ourselves, "What executive or military officer would be seen playing with one of these toys?"
As becomes clear over the next three days, the toys, the posted materials, and art objects are more than just decoration, although they perform that purpose too. Everything has a purpose, either to inform, to stretch the mind, or to introduce new perspectives on the issue at hand.
Not only the visual environment is unusual, but the auditory environment is as well. Music is being played-not canned Muzak, but real music. Though most participants don't realize it, and may never consciously notice the music at all, the selection of which pieces we're hearing has been carefully made to enhance each stage of the event. In these few minutes, before the group gathers for the first time, the staff has chosen "Primal Magic" by Strunz & Farah, "Rio Amazonas" by Chuck Jonkey, and "Dance the Devil Away" by Outback, with the goal of setting a tone of upbeat, energetic concentration as we prepare to launch into our work.
All possible standard signals have been changed in order to send the message that this is not business as usual: not a conference, not a seminar, not a workshop, not like anything else we've experienced.
The most obvious signals are the playful ones: toys, music, books. Another signal is the clothing of the arriving participants. All the participants have been informed in advance that casual clothing is preferred. No need for suits and ties-or high heels and hose-the goal is to maximize comfort as the level of physical activity fluctuates, and to help reduce traditional status and role signals.
Even small signals have been changed. The standard conference registration protocol is deliberately missing. Name badges are available, but alphabetized by first name. And this badge-along with breakfast-are all the participants pick up as they enter. No notebook, no package of materials, and most important, no schedule of events.
Participants get their badges, and staff members collect-and move to secure storage for the day-the briefcases, cellular phones, beepers, and all the other paraphernalia that carry the message of "business as usual." (Women participants are even encouraged to store away their purses; surprisingly, this often works.) Beepers, phones, briefcases: even if they aren't used, they all give the impression that their holder may be mentally called away at any time to higher priority work-he or she may even choose to leave. These objects send a subliminal message of non-commitment to full participation in the event at hand.
Carrying around these items would also slow participants down. As we'll see, the process to come involves a lot of physical movement from space to space, and within each space. It's important to relieve the participants of burdens: both the physical burden of lugging stuff around and the mental burden of worrying about its security. Far better to lock it all up and free everyone for focusing on the task at hand.
And it works. Having been rid of the need to carry things around, the participants have their hands free to pick up breakfast and wander out into the space, as they are meant to do at this stage.
As people begin milling around, one thing is very clear: we're not in Kansas anymore.
This dispersion of the participants into the setting, as well as the background hum of activity by the staff, are deliberate components of the event. When the participants walk in the door, they are coming from different organizations, or different parts of the same organization. They have different things on their minds-career agendas, personal concerns-some may not have even wanted to attend at all.
So the first order of business is focusing everyone's attention, getting all these different individuals aligned to working together on a common set of challenges. How do you get people to drop those differences that act as barriers, letting them focus on productive work?
Experience has shown that the staff-termed "knowledge workers" in the Taylor organization-helps set the tone immediately, even before the first session starts, by focusing on tasks and avoiding the temptation to chat with the participants. Gail Taylor explains what they've found: "If the knowledge workers are unfocused when the participants arrive, it will take until the afternoon for the participants to become aligned to working together." Instead, the entire facilitation team is actively creating a mood, a psychological setting-providing a model for proper and desired behavior.
So, the team is on site early, and while they're friendly to arriving participants, they avoid social conversation and don't discuss the process to come. Each team member is intent on work. This structuring of the atmosphere by the team transmits a complex message to the arriving participants, and they pick up this work-focused mood quickly.
Participants, with portable breakfast in hand, disperse into the space, picking up books and other objects, reading things posted on the walls, poking around on the computer display of the World Wide Web. The information being made available in all forms is high quality, irresistibly intriguing. Even we, as writers and long-time book collectors, were seduced by the 350-volume collection of books there. We like to think that we're familiar with most of the best books in our various areas of interest, having been vacuuming up titles for many years. But it had been a long time since we had run into such a high concentration of interesting books that were new discoveries for us. This exploratory process continues as a background action during the meals and transition points throughout the session, making every moment in the space an active mental exercise, an opportunity to learn new concepts and relevant information.
As the participants explore the room, browse through books and scan the information posted on the walls, it's unclear what positions they hold in their organizations. The badges give no titles. The casual attire gives no clues. What kind of participants does an organization need to send to one of these events to make it work?
For a standard DesignShop event, where one organization is tackling a large challenge, the answer to this question is-at least one representative of each affected group. This can include suppliers, contractors, customers, employees from all levels and departments, as well as the VPs and division managers who usually come to strategic planning events.
Elsa Porter, a Wharton participant who has sponsored DesignShop events in the past, feels strongly: "The most important thing about a DesignShop is how you put together the people. You must have project managers, stakeholders, all of the different perspectives in there."
A "stakeholder" is anyone who will be affected by the outcome of your business decision. This means including people who are normally excluded because they are thought to be adversarial or unwilling to participate, or are considered to have no need to know, or are vendors and not company insiders. They start as separate individuals with their own agendas and their own concerns. They become team members of the company, all pulling towards a win-win solution. The results, instead of being injurious because of the disclosure of proprietary information, or turbulent with perpetual personal conflict, end up producing cost savings, increased profits, increased creativity. The new work relationships forged during the DesignShop are capable of transforming the nature of the post-DesignShop business relationship into something new, different, and even better than the previous relationship.
Over the next few days, we interviewed many Wharton participants about their previous experiences with the process. Clearly, including a broad variety of participants was important to success. Bill Espinosa, at that time in charge of strategy for CKE, told us of an experience using DesignShops in the fast-paced and competitive world of the fast-food business. The key to success, he felt, was getting all the relevant stakeholders represented. It created an expanded participant pool of stakeholders that produced new perspectives and unexpected savings in time and cost.
In the Western states, the name "Carl's Jr." is readily recognized as a long-standing and significant part of the fast-food landscape. CKE is Carl's Jr.'s parent company. Generations have grown up buying hamburgers and charbroiled chicken from the 650 "stores" decorated with a snazzy star logo. Bill Espinosa gives the overview:
We are a sandwich concept. Our main products are hamburgers and charbroiled chicken. We have this really nice dining room. We already do partial table service. We emulate the aspects of a nice place to go. The stores are in good locations, but were hardly used other than at lunch time.
Bill Espinosa joined the large regional fast food chain in June 1994 as Vice President of Strategic Planning to help straighten out a situation needing immediate and major changes. Sales had declined for four years in a row.
One of Carl's Jr.'s problems was that it was primarily seen as a lunch establishment. This means that the units were used heavily at only one part of the day. Bill explains:
We basically do a lunch business. McDonald's does breakfast, lunch, snack, dinner, and late-night snack. We had to take a look at how we could introduce something that would bring in existing customers more frequently, or bring in more new people.
The new image of Carl's Jr. has two parts-we want to optimize what Carl's Jr. is now, and we want to offer a major new "day part." We do lunch, and now we want to optimize by going into another day part. We looked at how to develop another day part.
Breakfast was an option, but we felt dinner was the way to go. Dinner is a profitable, high ticket item. People come in for lunch or breakfast and want to spend only 99 cents. Dinner was the way to go and fit better with our image: the really nice dining rooms, partial table service, a nice place to go, good locations. We decided to pursue that.
Because Bill had done DesignShop activities at his previous company, he was able to use a subset of those techniques to help kick off the dinner project:
I simulated some mini-DesignShops-call them "DesignSessions." We had a training project that needed a jump start, and I used the techniques as a facilitator for one of our vice presidents to help her pull together an environment in which she could quickly accomplish a lot. I conducted one on the dinner project. We were working with .Long John Silver to bring in their food, equipment, etc. into a Carl's Jr., and create a "dual brand" restaurant.
Although these weren't complete DesignShop sessions, didn't include all the stakeholders, and were done in a highly modified form, the results were beneficial. At this point the organization was successfully moving toward serving dinner. In parallel, they had made a number of improvements based on consumer feedback, but Bill knew there was a major element missing:
We had already fixed labor, readjusted prices, and done everything the customers said we had to do in order to get back into phase with competitors. Yet, when I walked into a clean, freshly painted store, it looked old.
Those of us who've been in the food business knew what the problem was-the stores had not been renovated or enhanced in 10 to 12 years. The service systems, the physical plant, the logo, all sorts of elements in the 650 units had not been remodeled or image-enhanced.
What happens is that over the course of ten years, we blend into the environment, and our customer will drive by us. We no longer stand out. Players in the food industry find they need to reposition their image. It tells people "come in-we are new and fresh." The cycle is increasingly shorter. The rule of thumb now is an image enhancement every five to ten years.
It was one of those tasks which one human could not figure out, solve, and implement alone. It was going to require the input and skill sets from many different disciplines from inside and outside of the organization.
This was a make-or-break project for CKE, and Bill, brand new to the company, had the responsibility to make it work. He chose to bet the company's future-and his own reputation-on the DesignShop process.
Although Bill had given people a sample of what was to come with his modified "DesignSessions," no one else had ever experienced a full-fledged DesignShop event. Bill explained the full process to the president "as much as you can describe it in advance."
When it came to "Store 2000"-the new image enhancement and remodel program-we had to assume everything in the restaurant was up for grabs.
We would have to take in a ton of new information on where we are and where we should go in the future-augment our capabilities and skill sets. All this had to converge and come together to give us the specifications for the Store 2000. In order to make that very large jump, I needed a process that would help focus as much data and energy as possible.
The best process that I had experienced was the DesignShop process. This was far too important and complex a project to just dump on a group of architects and managers. The capital cost to remodel was $100,000 per store across 650 stores-that's $65 million. We needed the DesignShop process to make it all work. It had to work! So I persuaded management that a DesignShop was the way to do it.
Bill stressed that his experience had led him to the conclusion that a key point is getting all the stakeholders together:
The aspect of the process that really produces the value is the openness to ideas from all areas, free of the usual biases. That is what you need in order to feel like you've bathed yourself in enough data, with the right people, in an environment that supports the work.
The other part is that the process sends the message that there is no one in charge. The participants aren't trying to please any particular manager. Otherwise, there is a tendency for people to come in and think, "What do you want to hear?"
The goal of the "Store 2000" event was to get all the stakeholders participating to project themselves and the company into the future-to envision what a Carl's Jr. should be in the year 2000. So a wide range of stakeholders was invited to attend the event in late November at the Hilton in Anaheim right across from Disneyland.
A key part of the success would depend on having someone from each group of stakeholders present and participating-effectively representing their interests throughout the process.
There were about 45 people. We invited people from every major business processing group involved with the company. We invited the person who had done some of the major documents we would be reviewing at the event. We invited a typical customer. We also invited a number of consultants-marketing, packaging, building.
We explained to the vendors and consultants that their participation would be pro-bono. "It is a DesignShop where we will be trying to exchange ideas, not where you would be trying to sell us something." We wanted them to get involved, and there were no guarantees that they would be the uniform company, etc., that would ultimately be selected. The benefit to them would be that they would understand the direction in which we were going. Of course, they all wanted to know whether the others were coming for free. So all the outside participants had to come for free.
Some vendors turned me down and chose not to attend. They did not get penalized. No one was required to come. There were about 45 people who agreed to come.
The DesignShop process would result in the design specifications for that store-the Carl's Jr. store of the future. In accordance with the importance of the event to the company's future, a great deal of preparation took place:
Required advance reading was over 1,000 pages: our menu strategy, which the marketing department had just published; a database of marketing research, which we have on a continuing basis; a position paper by an outside consultant on trends in the food industry; data on competitors; five years of financials; and a couple of books to stimulate creative thinking.
It was proprietary information. A lot of people read all the 1,000 pages of required read-ahead material-particularly people from the outside.
About a month before the event, everything was coming together, when there was a change in presidents. The one who hired me, and approved the DesignShop, left in October and went to Hardy's. We had other changes happening at the same time. The marketing vice president had left. The holidays were approaching fast. We were either going to do the DesignShop session as planned or wait quite a while.
The new president and COO is Tom Thompson. Tom is also a franchisee and owns sixteen stores; his perspective is unique and well-grounded. I went to Tom and asked him what he wanted to do. Because we had announced the event to the franchisees, he was already aware of the plan. He had always endorsed the image enhancement, and had recognized what we had to accomplish in the DesignShop. He took it on faith that we needed this process.
Was Bill nervous about the DesignShop? He was betting his personal reputation on this. If it succeeded, he was golden, but if it failed
Yes. That is exactly right. This was incredibly strategic, because you do not get more than one shot.
In late November 1994 the Store 2000 event got rolling, with Matt and Gail Taylor facilitating and forty-five participating stakeholders from every category gathered for the three-day session. Not only would they envision what a Carl's Jr. should be in the year 2000, the goal would be to leave the DesignShop on the last day with actual design specifications for that store.
This was the critical challenge. CKE's goal was to start building the Store 2000 immediately.
The next step in the process was to say what elements of that Store 2000 can we afford to bring back into the remodel program? How many things stay and how many move? The objective was to design four prototype stores: interiors, uniforms, everything. We told the participants that they should address the whole gestalt. The people, product, environment-not just paint and plastic.
The end product had to be a design for a new-image store that creates the needed sales response from the customers: they rediscover what we are. It had to be complete enough to provide an exterior that would tell people we were there and an interior that made it a nice place to come back to, that was not tired. It had to be fresh and fun.
There was a ground rule with which we went into the DesignShop session-technology that could not be implemented in sixty days would not be in the remodel. For example, touch screen ordering in the drive-through is not yet available. We needed to roll out the new image by third quarter.
There were high levels of energy. Many people had seen the mini-DesignShops I had facilitated. They liked the technique. When they saw it in the full form they thought it was really powerful stuff.
This was a way to get people comfortable with the idea that they were empowered to help with the design. They do not have to wait for blueprints from someone else.
Note this point about whom you include on your list of stakeholders: it is vital to have the decision makers included in the event. That way if you have a question or need a decision, you just walk across the room and get it.
I told our internal CKE participants, "Get as much out of these people in the three days we have them locked in this room as you can. Extract every bit of data. Afterwards you will have this project book and you can refer back to it-the DesignShop documentation-and know when we talked about packaging, for example, what specific issues were discussed."
As an experienced DesignShop participant, Bill was able to see that it was going well.
The team had a feeling of empowerment. They got the best input from all of the key players.
Besides the energy, there were also high levels of conflict. At one point the franchisee representative said the franchisees could not afford to make these changes to all their stores. So there was the need to find a balance. We worked it through.
Several times people came to me and said, "I can't deal with what is going on in my breakout group. People are saying this and this..." I would have to say "We will deal with this later. Let's keep drawing this on paper. I would rather make a hundred mistakes on paper than build three stores and find out none of them work, or that they will not be implemented because they are too expensive."
These people were experiencing high levels of energy and conflict-doesn't sound like fun, does it? But remember, these people were surrounded by one of the most playful-looking environments they had ever experienced as adults-which sounds like goofing off and wasting time, doesn't it? The two extremes sound completely contradictory.
It certainly doesn't sound like what we traditionally consider a "productive or normal business environment," or behavior that is usually considered "productive or normal." This is precisely not a typical business environment.
It is, instead, a design environment.
Matt Taylor observes:
A world-class design environment often looks very chaotic. There is often a high degree of confrontation and disagreement with people testing different alternatives, switching sides and dialoging back and forth. It's also a happy environment, with people having breakthroughs. It is an emotional experience.
Appropriate behavior rules within a traditional organization do not allow for this type of emotion, confrontation, contradiction, and the attendant level of discomfort. But without these dynamics, you cannot have a design process. Instead, you have a bunch of people sitting politely maintaining conversation within a very narrow band width of propriety.
For most people, being within a creative process is signalled by a feeling of discomfort at some point. and discomfort is something we are usually trained to avoid.
Like Matt, Bill was also able to recognize the energy and conflict as a normal characteristic of working in a high-performance design environment. Pulling from knowledge of what this interaction meant, Bill was able to put aside his natural nervousness about the process and focus on making the high level of performance happen. The result-- group genius.
They got into it and delivered in three days. They produced designs, uniforms, color schemes-the whole bit. They even went further and developed the training system.
We put the focus on the food. Our restaurants had not really highlighted the food enough. We opened up the stores physically. A major objective was to put the food on center stage. At the end of the DesignShop event, we had design specifications for this.
We also had a plan to cut costs by doing a test remodel, checking what pays off there, doing the second at a lower cost, checking again, and so on through four stores. In this way we will test each concept, and the things that seem to have the most customer impact will survive as the basis for our remodel. [As positive results came in, the need for a fourth "validation" store was dropped, and only three test stores were built.]
These three prototype stores will take it down to what we feel are the absolute essentials for a remodel program. What we will provide is the option for a restaurant owner or franchisee to choose a full-blown enhancement with confidence, because they will know they are going to get their money back.
The support of the franchisees was critical. Bill was careful to watch the reaction of the franchisee representative at the DesignShop session:
She looked at the design and said, "This is very good because I have my personal livelihood at stake." The franchisees are very tough customers, because they may have to mortgage their homes or take money out of their child's college fund to do the remodel. They needed to see us be successful.
So the pressure to keep costs down and get sales up was intense. One way to do this was to speed up the project.
We set an incredibly aggressive timeframe. It was deliberately unrealistic because we were using time budgets as the means to set priorities. "Since I cannot do everything, what do I need to do first?" The aggressive deadlines helped everyone focus. In a project, the longer it runs the more money it costs.
Bill Espinosa did some consensus-building at CKE after the DesignShop, to make sure that the new vision was spread beyond the forty-five participants.
Especially because we were doing things a lot faster than the norm, I had to go to each constituency group and share with them the process and show them the objective.
At this point we said, okay, now we have the design specifications. The next step is to get the core competencies and skills. We then invited different designers to come in and take a look at the plan and provide proposals.
Interestingly enough, Bill Babcock, the designer who agreed to come to our DesignShop event, agreed to do the project. The other proposals that came in gave us twice the timeframe and two to three times the cost to do the project. Babcock's company had done the previous Carl's Jr. image enhancement ten years earlier-which worked-and they felt they could do it again. We too wanted the partnership to go on.
As a result of the thinking done at the DesignShop, CKE wanted to do the contract differently this time.
What was really interesting about this is the way we approached them. I was not going to approach them the usual way. In fact, I said that if they spent $15,000 on extra design effort and found a way to engineer $10,000 out of the cost of store, I would want them to do that extra work. And I said, "I am willing to pay you more for that." That is a different mindset.
By August 1995, CKE was part-way through implementing the results of the Store 2000 DesignShop. Could they judge its success at this stage?
The first prototype store opened only seven months after the DesignShop, and in its first full week of operation sales have already come up 10% over last year, without advertising or changing menus or the crew.
Although we did not meet our aggressive time schedule, when you take a look at the way other businesses do it, and the schedules proposed by top designers, we are far ahead of the curve.
Once the president got up there and sat in the store, he was comfortable. That store had many of the elements of the totally new store. We have pre- and post-market research showing the improvements are being well received by our customers.
We are now going into our second prototype, in Sacramento. As planned at the DesignShop event, we will go through the process of listening to the customer and to the operators and see what works and what does not work. We are going to get all of that feedback and cost-engineer it down. Basically we hope to cut the cost in half by only focusing on the changes that make a difference. Then the final prototype-the third one-will again cut the cost in half.
This cost-cutting was part of the intent of the DesignShop activity. Our target budget was going to be a certain dollar amount. When we introduced that number to our own internal people, they said it was impossible to cut the costs that much.
Last week we met in the new store. We wanted to get the most sensory feedback-the customers talking, the awnings buckling-pluses and minuses. The same people who had said that we could not operate within that budget were now saying, "We can do it."
Bill's alternative for coming up with the remodel plan would have been to do the "safe" and "clearly possible" thing by hiring a well-known, highly-respected consulting firm to do the job.
If we had hired someone, it would have been one of the top firms. They said it would take a minimum of a year to do the design and open the first store. We got quotes of about $1 million. Using one of them would have worked, because we would have spent enough money to make it work.
Instead, using the DesignShop process, we spent about half of that and opened our remodeled store in a little over half the time they quoted. It was a very good experience.
Now that the store design has been successfully completed, Bill Espinosa and the CKE team are here at Wharton to keep pushing forward issues of overall business development. They hope the next three days of uninterrupted immersion in the DesignShop process will bring them similar levels of benefit for improving the structure of the CKE organization to cope with the coming decades.
This hope of achieving benefits for their own organizations has brought the other companies and individuals to the Wharton DesignShop event. In a sense, this unusually varied range of businesses, backgrounds and goals-ranging from the CKE hamburger people to Air Force leadership to health care providers-is an expansion of the "stakeholder" concept. What could an aerospace engineer contribute to a business school professor? What insight does a former nurse have for a management consultant? This wide span of stakeholders in 21st century organizations will certainly test the ability of the DesignShop format to extract value from a participant pool. We'll see if the variety helps or hurts.
The participants are still roaming the space, jump-starting their minds with the information all around them, and picking up an attitude of focus from the staff. Then a deep bell sound is heard, signaling that it's time to begin. Everyone drifts into the largest space, the "radiant room," defined by the half-circle of gray walls enclosing a set of chairs facing inward. Matt and Gail Taylor are at the front as key facilitators. Time to begin.
These challenges will continue the pattern started in the previous chapter. Take a few moments to record your impressions of whatever struck you in this chapter. After you have finished, if you wish, refer back to the chapter to fill in any gaps or clarify any ideas. What questions are provoked?
1. Sketch one of the nvironments that you live or work in and describe how people behave in it. How does this current environment stimulate or inhibit the processes of individual or collective action? What is the soundrack you life and career is set to? What works for you and what doesn't? Include taste, touch smell, noise, visual aspects, etc.
2. Now sketch the environment as it could be and describe the new ways of work and behavior that it evokes. What changes make it a better place to work and live, changes that appeal to the heart and support the spirit as well as the mind? If you don't know how to do this, that's OK; you've identified a new realm of personal exploration just waiting for you.
3. Your sketch from Challenge 1 is the condition. Your sketch from Challenge 2 is the vision. The difference between condition and vision creates the problem. The problem is not the condition. The problem is how to bring the vision to the condition. What steps can and will you take to bring a part of your vision to you today?
|1999 Foresight Gathering|
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