Show me the money

Is economics all about money? A sociologist made the comment this week in a meeting that economics “wasn’t supposed to be about money”, it was intended as the study of institutionalised interactions, and that money just happens to be the dominant institution of our time.

I’m not sure that he’s right. I agree that economics may not be simply about money, but I’m not sure that it’s
about institutions either. For me, economics is about the study of human interactions in an irreductible form. Your spending choices are one place where your values and beliefs are most naked.

Show me someones credit-card reciepts for a month and I’ll tell you how much they really care about the environment, society, creativity or their fellow man.

Put simply, you can tell a lot about someone by the choices they make when the chips are down.

If economics is about understanding real-life choices so that we can get closer to insights about what people really think (not just what they say they think) then sign up.

Filed under: Business

The economics of empathy

Empathy is the only business skill that matters.

If you can’t understand your customer you can’t sell to them. If you can’t put yourself in your supplier’s shoes then you can’t negotiate with them. If you can’t be your end-user for a day then you have a problem.

Go to a phonebox down the street and call your office anonymously. Ask to speak to someone about buying your widget. Be your customer. Or else.

Filed under: Uncategorized

Design Metrics

As an economist I love metrics but but I’m becoming increasingly aware that you can’t measure love.

I don’t care if a focus group wouldn’t like my favorite new Waiheke Syrah (Passage Rock Wines 2006) or that my new shoes were so unpopular that the component manufacturer had to make them and market them themselves (Vibram Five Fingers). The fact is that these products have been hugely successful because they delight a small niche market.

When creating really exciting products I have to admit (even as an economist) that metrics won’t save you. It takes intuition, empathy and insights. There are metrics that can help you get to those insights, but in the end the design decisions will come down to a leap of faith.

Build a platform for that leap, but remember that your gross marginal cost of production analysis can’t make the leap for you.

Filed under: Design

Live your brand

In 2002 I wrote a paper for a strategy project at Berkeley for Cisco Systems. The paper included a quirky take on the classic management aphorism from a McKinsey Quarterly article “Culture eats strategy for breakfast.”

I recut the saying as:

“Execution eats strategy for breakfast.”

I still believe that it’s true despite a career as a strategy advisor.

Filed under: Design

Why design

Design thinking adds value to business.

Filed under: Business