Hilti, a manufacturer of construction tools, noticed that when tools break contractors can't finish their jobs on time. Hilti realized that contractors don't bring in money by owning tools, they make money by using tools to get their job done as efficiently as possible.

So Hilti developed a business model where contractors pay a fixed monthly fee for a fleet of tools. Hilti replaces or repairs any broken tools and upgrades all the tools when the usage period is over. Contractors can select the type and quantity of tools they need.

As a result, contractors have a streamlined cost structure for tools and are more productive because of consistent high tool quality. Additionally, Hilti has incentive to build a more sustainable, long lasting, high performance product.

(The following is adapted from the HBR article Manage Your Energy, Not Your Time by Schwartz and McCarthy)

Working longer hours is rarely the answer for improving performance.

This gets people exhausted, disengaged and sick.

Instead focus on renewing your personal energy by adapting rituals that replenish physical, emotional and mental resilience.

1) Physical Energy
>> Get more sleep
>> Identify energy lapses, such as restlessness, yawning, difficulty concentrating
>> Take quick breaks away from your desk at 90 minute intervals

2) Emotional Energy
>> Through detailed emails, notes or conversations regularly express appreciation to others
>> When an unsettling situation occurs, consider it through a longer lens. Ask, "How will I view this situation in six months?" Then ask, "How can I grow and learn from this situation?"

3) Mental Energy
>> Perform high concentration tasks away from phones and email
>> Respond to voice mails and emails at designated times during the day
>> Each night, identify the most important challenge for the coming day, then make it priority number one when you get to work in the morning

4) Spiritual Energy
>> Spend time on activities you do best and enjoy most
>> Live your values: if consideration is important to you but you're always late, practice showing up five minutes early for everything

Adapted from "Managing Oneself" by Peter Drucker

"Success in the knowledge economy comes to those who know themselves--their strengths, their values, and how they best perform."

To discover your strengths, do feedback analysis.
Whenever you make a key decision or take a key action, write down what you predict will happen. Six months to a year later, compare the actual results with your prediction.

This will show you the following things: your strengths, what you are doing or not doing that prohibits you from enjoying the benefits of your strengths, what you're not that great at, and what you have no strengths in.

Concentrate on your strengths.

1) Position yourself where your strengths produce results
2) Improve on your strengths
3) Identify ignorance toward other disciplines and open yourself to them when they solidify your strengths
4) Identify and remedy your bad habits that stand in the way of your strengths
5) Don't take jobs or assignments in areas where you have no strength.

Put yourself in the following position:
"Yes, I will do that. But this is the way I should be doing it, this is the way it should be structured, and this is the way the relationship should be. These are the kind of results you should expect from me, because this is who I am."

A fair question to ask of other knowledge workers: "What do I need to know about your strengths, how you perform, your values, and your proposed contribution?"

It turns out it can actually be a challenge to be truly thankful. We Westerners are brought up to take pride in being self-reliant and independent--so much so that it sometimes becomes difficult to say "thank you" when someone else performs an unsolicited, unexpected, authentic and selfless act of kindness. Rather than be truly appreciative of and celebrate that person's generosity, we find ourselves guilt-tripped into doing something equally generous out of a sense of obligation, Hammurabi's "eye for an eye" principle applied to philanthropy. The irony is that giving out of guilt does not feel satisfying at all.

Last night, a 70-year-old man in a suit sitting next to me at the bar at Avec paid for my dinner. Both of us were there alone, looking to have an exceptional meal (it was) on our business stay in Chicago, and soon found ourselves sharing our small plates with each other and with the couple on the other side of him, and exchanging stories about the other incredible meals we've had while traveling the world. When our bills came, he insisted on paying for mine and I relented after a minute or so of protest. Walking back to the hotel still trying to process what had just happened (and realizing that we didn't even know each other's names, having skipped the formal introduction part of a typical first meeting), I was momentarily overcome with guilt. Did I give in too easily? Was he regretting his choice? Should I have given him a hug or a granddaughterly kiss on the cheek to show how moved I was, even if it wouldn't have felt completely genuine? I felt buhao yisi, a Chinese phrase that doesn't have a succinct or accurate translation in English but generally feels like a combination of undeserving, ashamed, appreciative, and touched, all at the same time.

A brisk walk in the crisp, cold Chicago evening cleared away all of the negative/doubtful emotions and I convinced myself to simply feel blessed (for lack of a better word with less of a religious connotation), and to appreciate and remember mankind's capacity for giving.

A side note on environment impacting behavior: while other restaurants with more sophisticated or romantic atmospheres that I passed were rather empty and sluggish on a Monday night in a slowing economy, Avec was packed and bustling and couldn't keep a line from forming in its narrow entryway. I'm convinced that it's not just the food that brings people back, but also the sense of community that is fostered by the long bar and long tables where singles and couples are forced to sit elbow-to-elbow with strangers as they enjoy sipping from an impressive selection of imported beer and wine, and savoring the delicious concoctions coming out of the kitchen. It's hard not to want to talk about the food with neighbors when it's so good, and the structure of the restaurant makes these kinds of exchanges easy.

Photo courtesy of tellersfood.blogspot.com

During the second presidential debate, which seems like ages ago, the candidates were asked a question that I wish Mr. Obama had answered differently: "What don't you know, and how will you find the answer if you're president?"

Mr. Obama responded that they should ask his wife what he doesn't know, and then went on a tangent about what America needs (tax relief, better health care, etc).

He missed an opportunity to talk about the power of open innovation working in politics.

A better answer would have been while he doesn't know which specific types of technology will bring clean power to American homes, he does know that building the right incentives will inspire Americans to invent them.

Or while he doesn't know exactly how to get Americans focused on preventive care, he does know that if you give employers and doctors and individuals incentives to prevent illness, America can build a healthier country.

Or while he doesn't know what the perfect mass transit system looks like, he does know that if you build the right rewards Americans will develop systems that make us less reliant on foreign oil.

These are just a few of the big problems Mr. Obama faces as president. He should not pretend to know precisely how to achieve these goals, nor should he simply pass slow moving and watered down legislation. But he should use his post to structure markets so they point toward goals that transcend politics.

Good morning world. Yes, Obama was elected yesterday.

What has happened to the state of politics in the USA now? Will people continue to stay engaged? And what were the triggers that led to the highest voter turnout in ages? I believe there were a few things that led to this: the internet, the state of our country, and an Obama campaign that stayed optimistic and focused on resolving our country's issues. It's no question that negative campaigning, while dramatic, is fleeting and doesn't manage a sustainable interest. It's like a sugar high and both are unhealthy.

My mom, I'm proud to say, voted for the first time in her life for an American president after becoming a US citizen a few years ago. Though she's lived in the US since 1970, she is still working on a strong command of the English language. Yet, she had a point-of-view on the key issues being debated. Where, in the past, we avoiding talking politics, we talked genuinely about the economy, health care and education in the days proceeding the election. Something was stirred.

Yesterday, as my mom routinely picks up my nephews from elementary school, my nephews called to say hello on their way home. One of them had a mini-election in their classroom and Obama won handily 17-3 (this in NM which voted Republican in the '04 election). 10, 9, and 8 years old, they were screaming for Obama to win (even though their parents seemed to oppose the candidate). Something was stirred. I thought more about creative ways that teachers could introduce the notion of a political system at an early age.

This is indeed a new era in the American political system which has (to a pleasant surprise) created a sense of ownership and participation among the masses. The streets of SF were alive and with energy last night - hooligans - but, for an election?! Something deep was stirred and there is great momentum in the country right now. As Obama mentioned yesterday, this first step is but a chance to enable change. There is a responsibility we all carry now. But, no doubt, there is even more confidence in our abilities after yesterday.

Congratulations to Mr. Obama, his family, and the entire campaign. I'm giddy.

The following is a summary of the article by Geoff Colvin found here.

Success is not based on natural talent. It is a choice.

Studies of accomplished individuals show that few of them achieved anything great before the individuals started intense training.

What separates high achievers from everybody else is something researchers call "deliberate practice." Deliberate practice is a set of elements that, when combined, form a powerful system to improve performance.

The elements are:
1) DP is designed to specifically improve performance. The idea is to constantly stretch yourself beyond your current abilities. This requires you to identify those parts of performance that need to be improved, then work on them. For example, Tiger Woods drops golf balls into a sand trap, steps on them, then hits them out.

Great performers isolate very specific aspects of their game and work on just those things until they get better, then they move on to the next thing.

2) DP must be repeated a lot. But you must choose an activity that is just beyond your current capabilities. Then repeat. For example, Ted Williams would hit baseballs until his hands bled.

3) Get regular feedback from somebody who knows what they're talking about.

4) Expect a mental exercise. This is not mindlessly hitting tennis balls against a wall. It is identifying and focusing only on unsatisfactory areas and working to improve them. Famous violin teacher Leopold Auer told his students, "Practice with your fingers, and you need all day. Practice with your mind, and you will do as much in 1-1/2 hours."

5) It's hard. Seeking out what you're not good at puts you in an uncomfortable spot. But overcoming those situations makes the difference. The fact that it's hard will prevent most people from doing this, which will set you apart.

6) Before work: Set goals. Poor performers set no goals. Mediocre performers set general goals that are focused on a good outcome (win an order, finish a proposal). Excellent performers set goals that improve their own process of reaching outcomes.

7) During work: Observe yourself. Novice runners think about anything that gets their mind off of running. Elite runners focus intensely on their bodies by counting breaths and strides to maintain set ratios. At work it's called metacognition, or knowledge about your own knowledge. Top performers do this as part of their routine.

8) After work: Average performers tell themselves they did fine, great or poorly. The best performers judge themselves based on what they're trying to achieve. You must select a metric that is just beyond your current limits.

So where do you start? By asking what you truly want, and what you truly believe. The more you want something, the easier it will be to keep at it when it's difficult. And the more you believe that if you put in the work you will eventually perform at a high level, the better chance you have of making it real.

In an article by Kellogg School of Management's Professor Andrew J. Razeghi, the author urges people not to cut back on research and innovation during tough financial times, because these are the areas that are most vital to a company's survival. He cites many examples of product inventions that we now take for granted that came about during the Great Depression because smart and creative people discovered and catered to unmet needs. For example, Miracle Whip was invented during the Depression and marketed as a tasty new dressing to make vegetables and sandwiches more appealing during a time when meat was scarce and expensive. It outsold all other brands of dressing and mayonnaise within six months of its initial launch.

Razeghi's six tips for innovating through economic downturns are:

1. Listen to the market. It's quieter when it's less crowded. Unmet needs abound.
There is no better time to invest in user and market research!

2. Invest in your customers. Now they need you most. Loyalty hangs in the balance.
Offer all kinds of services to keep your existing customers loyal to you.

3. Rather than reduce price, offer more value to your customers and demand greater value from vendors.
Reducing prices for the sake of reducing prices only serves to negatively impact the perceived value of your product.

4. Increase communication with your customers.
Don't let up on advertising; studies have shown that it is critical to maintaining sales.

5. Move longer-term projects forward, not back. Now is the time to grab market share.
Improve product quality and invest in new opportunities that will help gain you market share while other companies lost market share by cutting innovation resources.

6. In recession, not all costs are created equal. Maintain or increase investment in "good costs," prune "bad costs," and use judgment on "it depends costs."
"Good costs" are marketing, innovation and customer quality. "Bad costs" are fixed and working capital, manufacturing, and general and administrative expenses.

This article (which you can download here) definitely helps to promote the creative industry as our jobs are to help companies communicate to and develop new products for its customers. Still, part of me wonders if there is data out there that suggests otherwise? Who wants to play Devil's Advocates and do a little more research?

Isn't it nice when you spot the leftovers in the back of the fridge wrapped with a thin spread of saran wrap and you realize, "Oh, it's the spaghetti with the delicious pasta sauce I made yesterday!"

Now imagine if that dish were either covered in a paper towel, aluminum, or better yet, dreadful styrofoam. Your thoughts might change to, "Crap. Must. Explore. Further." And then you rationalize how important it is to you at the time and either move the milk carton and OJ to see what's lurking or just leave it. Let's face it, mystery is fun, but only when its entertaining. Otherwise, it can be a frustrating nuisance.

Well, how about a new (more transparent) way to package some good ole' fashioned politics? Enter an industrial-sized roll of The Internet. I agree with A Huffington in that the web is changing the game of politics in two very distinct ways. One is that it's creating access, thus generating interest, to a generation of people who now head online for current events instead of buying a newspaper or watching TV.

The second, and more to the benefit, is that it's helping to establish a culture of participation and transparency. It's not at all perfect, but this election has employed a 'wiki' approach to fact check or provide a counterpoint to what the campaigns are saying via blogs, emails, and video on the web. The politics of before where lies were too much work (and possibly old news the next day) to chase down and verify by the media are coming to a close.

A Huffington mentions that, "Traditional media like moving on to the next shiny thing. But bloggers love revisiting a story." This has all but truly played out, for example, by the vast amount of user-produced video series on YouTube, highlighting the controversies, misleadings and obvious contradictions of the campaigns. Not to mention access to the syndicated debates and speeches one may have missed the night before.

Onwards towards a culture of transparency. The only way to build genuine trust is not so much by what people say, but by what they do. And if the people in public office behave in a more transparent way, this will bring back a trust in our government that hasn't been there for a while. Oh, and private companies, you're not out of this either. The same concept applies to you and your responsibilities to investors. The internet is coming for you.

It's a little strange (and doesn't necessarily help our reputation in the business world) that this article chose to share the story about the High-Tech CFO Action Figure to demonstrate what design thinking can do, but hey, the more people that know about us, the better....

What happens to the design industry in a downturn? I am a little young to have much experience in this matter, but I recall having a terrible time trying to find a job after college in 2002 and ex-Sapient designers still grumble about how the creative team there was the first to be cut in the dot-com bust.

Perhaps, then, it is wise to follow the lead of certain design consultancies in opening up new revenue streams in order to decrease the risk of relying solely on in-house talent. Method Ventures is the VC arm of the SF-/NY-/London-based brand experience firm that buys equity in start-up companies in exchange for interesting and cutting-edge work. In a DesignWeek article, Chief Innovation Officer Chris Tacy affirms this business practice:

We realised that we could create a venture practice that provided the sort of design services that create the innovation and differentiation needed for start-ups. And we could do so in a manner that met their needs, would be affordable and which enabled us to find revenue streams not tied directly to head count.

Fahrenheit 212 takes a different approach with a royalties model: it puts

...up to two-thirds of our fees at risk, making them contingent upon the achievement of success. Our success is your success, and our reward is tied directly to very concrete, pre-agreed commercial milestones within the prescribed time horizon. These milestones are client-specific, typically mirroring the dates, gates and metrics of the company’s prevailing innovation best practice. This model…is about creating a seamless alignment of our client partners’ ambitions and our own. It ensures we run the project for success rather than cozy meetings. And it makes us the only innovation company on Earth that doesn’t get paid more the longer it takes to get somewhere.

I have written them to learn more about how this impacts their creative process and what kind of pre-engagement analysis is involved in scoping projects, and am waiting to hear back. (Anyone else know?)

Many other companies publish books, teach courses, and host events and conferences to bring in extra cash. IDEO additionally utilizes the vast body of architectural, anthropological, and sociological knowledge it has gained through research projects over the years to contribute to the tourism industry in its “IDEO Eyes Open” city guide series.

Apple's latest ads for Mac are pretty hilarious. Now that Vista has been out for a while, there's no arguing the issues it has with its operating system. Apparently Microsoft is planning another advertising campaign with the (appropriate) tagline of "Free the People". But it's going to take a lot more than $200M in advertising to try and convince people Vista actually works.

Funny enough on the Mac ads, the Apple guy doesn't even say much, it's mostly the PC guy looking ridiculous trying to make excuses or ploys to convince the audience there is hope.

Ah PC Guy, it's a hard sell...

When Nau came onto the fashion scene a few years ago, it appeared to be an even higher end, more exclusive PataGucci-type urban-outdoor hybrid fashion house, with an emphasis on urban style and sustainably sourced materials. Those of us who went to the compostmodern conference this year remember hearing Mark Galbraith, VP of Product Design, answer tough questions about why they grew their organic cotton in Turkey and manufactured their clothing in Thailand. (It turns out that Turkey is the world's largest supplier of organic cotton--a burgeoning industry initially launched by demand from companies like Nike and Patagonia--and that Thai textile companies were the first to develop ways to process organic cotton.)

What I wondered from the beginning, though, was whether Nau could survive with sustainability as its only real point-of-view. They attempted to come out with some unique designs, but weren't innovative enough in this department to justify the cost of their products. They sat the fence between functionality versus style, and with the slowing economy this ambiguity is likely a major cause of their failure to generate sufficient operating revenue.

Lucky for us, this means you can buy Nau's high-quality clothing made of recycled polyester and organic wools and cotton at half-off the original price, until they sell out. They only sell through their retail stores or online, so don't bother looking for their products at REI or Nordstrom.

In other eco-fashion news, Patagonia has uploaded the Footprint Chronicles, an interactive and informative module that provides transparency on the design, manufacturing and distribution of their products.

Designers talk about wanting to design "intuitive" and "easy-to-use" products, but in many cases a great deal of value can come from designing products that teach new behaviors, or create new mental models. The invention of the QWERTY keyboard, for instance, has enabled the creation of a string of new communications tools in the last century, and has increased the pace and scope of communication. Everyone who remembers struggling through Reader Rabbit tutorials in elementary school will agree that mastering typing was no easy task, but we certainly have expanded our ability to communicate as a result of doing so.

But can you design for health and longevity? Artists/architects Arakawa and Madeline Gins seem to think so. Whereas most of us will take ourselves to the yoga studio or gym to stimulate the muscul0skeletal, vascular, excretory and other physiological systems that keep us healthy, they've designed housing that forces people to move in unusual--and often uncomfortable--ways. The uneven floors, the unconventionally-placed electrical outlets, and other challenging features effectively force your body to exercise strength, flexibility, and balance just to perform daily activities.

This project raises a plethora of questions, not the least of which concern safety, legality, and the cultural construct we call "home." As designers, how do we strike an appropriate balance between user-centered design and behavior-inducing design? What conditions are necessary for one or the other to succeed in the marketplace? In a world that is caught up with terms like "human-centered," "humanistic," "empathic," and "user-friendly," "intuitive" and "easy-to-use" may not always be the most desirable or significant attributes of what we create.

A recent conversation between me and my good friend Molly, an MFA student at CCA:

J.C.: Do you think there is a contradiction or paradox between the trend of people valuing craft and authenticity vs. the trend of democratization of high design? An example of the former would be wanting to buy Italian-made housewares because Italians are historically great houseware designers, or wanting to eat and buy whole food from farmer's markets. An example of the latter might be people who are willing to buy knock-offs of iconic products--the IKEA phenomenon, in a way.

M.A-B.: I don't think its a paradox so much as a challenge; people are trying to integrate the two. I think its about appropriateness, locality, human sensitivity. I think those things can be a part of democratized design. It's important to retain local culture and values without being overly nostalic about it

J.C.: So are you saying that to imbue these products with "craft and authenticity" is the challenge of the designer or the vendor?

M.A-B.: No. I don't think "imbuing" design is really right; I think if we value "authenticity" and craft we have to ask ourselves why--what are those things actually? What are the values in those things that we are looking to maintain and multiply? Is it diversity? Is it the low-tech usability? Is it sustainability?

J.C.: I guess what I'm trying to get at, at a more general level, is what kind of relationship, if any, do these two trends have? Are they correlated?

M.A-B: I think people are paying attention to the objects around them. My program has sort of taught us that the modern-day citizen is really looked at and treated only as a consumer. But people take pride and interest in their role as consumer; identity is all wrapped up in buying and owning and, as a result, people not only want to have a role in the things around them (hence DIY and craft), but they also want to be experts (hence democratized design). Plus, manufacturing is so cheap. The leaders in design are trying to figure out ways to integrate the two better--like nike's ID labs. And designers are building in variation into the manufacturing process.

But the real money is in services, so I'm told. You can't really make money off a product any more.

J.C.: Yes, Enric is always talking about "servicizing." It's true, just look at Flor carpet, Patagonia, etc.

M. A-B: Most ID [industrial design] people seem to think completely personalized ID products built on rapid prototyping machines are the wave of the future

J.C.: Which makes it both democratized design, as well as authentic, in a way--authentic to the consumer, for him- or herself.

M.A-B: Then, the question of the role of the "designer" comes into question. I think people still like brand (going back to identity issues).

J.C.: I think identity is how you combine brands and your own personal POV or remake of products. Ironically, at a meta level, all of this "eclecticism" (if we can call it that) starts to look the same.

M.A-B: It is pretty homogonized at this point. In his writings, Adorno talks about how, as new things are created, they are pulled towards the center, keeping everything much the same. I don't know if I completely agree with that. Maybe we're all just more accepting of differences, more accustomed to them. Identity is more subtle. That will be the tag line of my brand when it comes out! "Identity is more subtle."

J.C.: Yes, girlfriend.

The word has been going around and around that software would be going online and subscription based, or free, in the near future. This future is slowly becoming more evenly distributed. We all know about Google's apps and are starting to see Adobe and Autodesk come off the shelves and into the cloud with Photoshop express and Project Draw.

The February Progress Report for the Designers Accord is out and my fears of this organization being merely a well-intentioned handshake between designers and affiliates are allayed. The list of guidelines has been stream-lined and a helpful introduction about carbon footprints from Natural Logic is a good starting point for fulfilling Step 4: Measure your carbon/greenhouse gas footprint and pledge to reduce it annually.

In other musings on sustainability, I found it interesting to see that, in a Levi's Store in Chicago's Wicker Park, their Capital E line of jeans made from organic cotton were integrated into the rest of the clothing display. The only indicator that they were eco jeans was the white-and-green Levi's label replacing the signature red label. A great example of how to effectively market (or not market!) green products.

[via apophenia] I always wondered who clicked on banner ads. There don't seem to be perfect data, but apparently "the 6% of the online population accounting for most of the click-throughs skews toward male Internet users ages 25 to 44 with household income under $40,000." I love the author, Danah Boyd's, beautifully politically incorrect hypothesis that, and I paraphrase, only dumb poor guys from the country click on banner ads. The best thing is the part of her hypothesis that says, and again I paraphrase, the same dumb people are the ones who meet up with strangers on social networking sites.

For most of us, this is no surprise. Nobody you know clicks on those idiotic epilepsy inducing things. You probably couldn't find anyone who does within a mile radius of your house, but there are probably at least one or two people making money off of them in your neighborhood.
The funny thing is, even though there is a lot of money being paid for clicks, these are not the clicks that most advertisers want. For instance. In meantime, other models of ad pricing are getting more traction.

Even though some are saying that this discovery has laid bare one of the biggest problems with online advertising, the real interesting thing to me is these people seem to actually be interested in the contents of banner ads. I have been known to fall for an especially funny or useful marketing ploy, but what is going on with these guys? They meet up with strangers online and then click a bunch of banner ads? I guess I never really thought about it, but I'm not surprised that the two activities are related.

Motorola is considering a "structural realignment" to spin-off its mobile device business. The article mentions that Motorola's main problem is its inability to come up with something new to follow the one-hit wonder Razr. If it does, in fact, move in this new direction, Motorola should consider two things.