In the ’90s, The Discipline of Market Leaders (by Michael Treacy and Fred Wiersema) asserted that companies had to align around one of three business philosophies in order to become a market leader:
- Low cost leadership (WalMart)
- Product innovation (HP)
- Customer service (Nordstroms)
Whether you agree or disagree with the authors’ premise, I would say that customer service has become somewhat irrelevant. The User Experience has replaced the concept of what great service used to represent.
Apple, Amazon, mobile devices, and apps have shown that having a great return policy and nice reps just doesn’t cut it in the digital age. Many of the new market leaders have taken the time to carefully design everything so that customers have a completely different kind of relationship with their companies. That difference directly impacts corporate culture, employee engagement and retention, adoption rates, customer satisfaction, market share… and ultimately long-term viability as market leaders.
Incorporating design into a company’s DNA will play a more significant role in the future as we deal with shortened product and industry lifecycles facilitated by technology. And, because lifecycles continue to get shorter, companies aspiring to market leadership require an interesting and concurrent mix of stickiness and nimbleness. The stickiness comes from design. So does agility.
With that context in mind, it’s particularly interesting to note yesterday’s announcement that John Maeda, President of Rhode Island School of Design, or RISD, will join Kleiner Perkins Caufield & Byers as Design Partner. In this role, Maeda will help portfolio companies “build design DNA into their cultures.”
KPCB has just upped its game in the venture capital community. I think we’ll see some interesting things come out of their portfolio companies including a growing number of very attractive acquisition targets and startups that grow into market leaders and then go public.