Foresight "Group Genius" Weekend
Leaping the Abyss:
Putting Group Genius to Work
Beginning the Quest
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
As people begin milling around, one thing
is very clear: we're not in Kansas anymore.
Creating an Atmosphere
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
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.
Who Comes to a DesignShop?
Bringing Stakeholders Together
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
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
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.
Carl's Jr.:Going Beyond Hamburgers to Bring
Its Stakeholders Together
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
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
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
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
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
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
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
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.
Time to Begin the Group Process
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,
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?