Better by design?

For the people

It’s all about the customer, as Comacc managing director Steve Nathan can tell you

Taking your business across the Tasman isn’t always easy, as payroll software company Comacc discovered. Australians speak the same language but that doesn’t mean much when it comes to business.

“New Zealanders tend to go in and say, ‘here we are, we’re New Zealanders, you must like us’,” says Comacc managing director Steve Nathan. “And of course it isn’t like that.”

Comacc opened an office in Sydney three years ago but to date less than 10% of total revenue comes from there. However Nathan remains confident there is great potential in Australia and further afield in the Pacific and Asia. “The reality is that if we can get the same market penetration in somewhere like Sydney that we do in New Zealand, we can double or triple our revenue.”

He hopes a Better by Design audit will provide the focus to do just that. It was Tom Peters who set Nathan and Comacc on this path. Peters, the keynote speaker at last year’s Better by Design conference in Auckland, was enough of a draw to get Nathan along. And something Peters said got Nathan thinking.

“He made a comment about the fact that 80% of products are purchased by women but 75% of those products are designed by men, which is a truism but it’s a fairly accurate truism. I looked at my business and thought, well, the bulk of my customers are female, as in the users of payroll software, and every member of our design team is male. That got me thinking about looking at our products differently.”

Then he heard Tim Brown, CEO of US-based innovation and design consultancy IDEO, talk on the value design adds to business. The light bulb went on in Nathan’s head. Comacc was starting to look like a 15-year-old business, he says, well established and hugely successful but a bit tired. What harm would there be in getting a design audit?

Nathan chose to involve every one of his staff in the audit, which meant a lot of meetings, many of them without him present. But then the audit showed the company was too dependent on him anyway. Including all staff was simply a way to ensure all possible ideas were canvassed, says Nathan. Excluding anyone meant excluding a possible idea.

Partly due to a personal connection, he went with the audit team of Design Audit Partnership, which includes DesignWorks Enterprise IG, business advisors PricewaterhouseCoopers and product designers Mark Pennington and Neal Smith (who he had worked with in the past).

The audit involved six or seven site visits and lots of questions.

The result has been a complete reorganisation of the Auckland-based company and a change in direction.

Comacc specialises in payroll software. It does other things but that is the core business and has been since Nathan and his father started the company 15 years ago. Naturally, its catchphrase was ‘Comacc, the payroll people’. It owned that space. “Most people in our industry, if you said Comacc, they would come back at you with ‘the payroll people’. We spent a fortune doing that,” says Nathan.

But the catchphrase has now been changed subtly to ‘Comacc, for payroll people’. “What we discovered going through this process is that even our strapline is all about us and not about them so what we’ve done is change three letters. We’ve taken the word ‘the’ out and changed it to ‘for’. It’s now ‘Comacc, for payroll people’. And that’s a 180-degree different view of the world. It’s all about what we can do for payroll people and it’s about solutions and products and services, everything for payroll people.”

The simple change to the marketing catchphrase also signals a shift in attitude inside the business, Nathan says. It’s changed the way we look at our products and the way we look at all our marketing, he says.

“We’re going through this huge exercise at the moment, right down to rebuilding our website. We’ve come up with this fictitious person called Mary who is a payroll person and everything in the business is around making Mary’s life better or easier. That’s an evolution that we’ve gone through having come out the back of the audit, but what the audit taught us was to step back and look and think beyond our own view of the world. If you have a largely female audience and a largely male team, the model is back to front.”

Nathan describes the audit process as “extremely challenging”. After all, companies naturally evolve and Comacc was already pretty successful. “As a business owner you think you’re pretty bloody good at what you do but you expose yourself personally in the audit. I found that pretty challenging.”



Wheels on fire

How Phil and Ted’s mastered the language of successful branding

It was 1998 and Campbell Gower had just bought out his partners in Phil and Ted’s Most Excellent Buggy Co. At that stage, the Wellington-based baby buggy business was pretty much run out of a garage in the Wellington suburb of Berhampore, says Gower. He had been a partner since 1996 but knew he had to come up to speed pretty quickly in marketing, exporting, engineering, manufacturing, industrial design … just about everything necessary to run the company.

When he looked up the Yellow Pages under industrial design there was a listing for Peter Haythornthwaite in Auckland, but Gower didn’t want to bother with someone based so far away. The only other listing was for a guy in Waikanae.

“I phoned him and said, ‘look I’ve got this company. I need some help. You can help; you’re an industrial designer guy.’ He said, ‘well my speciality is in round cheese packaging’. Okay, I thought, probably not our guy then. Oh bugger it; we’ll have to do it ourselves.”

When Gower took full control the company had one customer in Australia, a small market in Holland and an annual turnover of around $250,000.

Phil and Ted’s now has 20 staff and exports more than 90% of its production to 20 countries. Turnover last year was $18 million. Its products are made in China at a factory staffed by 200 people, which only makes Phil and Ted’s products.

“We have a little dynamic which is 20 staff, 20 countries, 1,200 doors and 200 people in China.”

Growth, he says, was a process of minimising mistakes. The company obviously fits the Better by Design audit criteria but given that sort of success, why bother with a design audit?

Because someone from New Zealand Trade and Enterprise recommended it, says Gower. Until then, he didn’t really know anything about Better by Design. It’s fair to say he’s been thrilled with the process and the outcome.

Before embarking on the design audit, no one at Phil and Ted’s really knew much about industrial design, he says.

“Sure we collaborated with people but it’s difficult to know how best to contract with people offering design services. It’s quite difficult to know how to say, ‘this is what I need’ and there’s a lot of language and lexicon which goes with it which can very clearly express what you need if you know it and they can be kind of scary because of that.”

The company now employs three industrial designers, and more designers are knocking on the door than it knows what to do with. Nice change.

But perhaps the most powerful outcome of the audit was it re-energised the company and gave Gower more confidence. A lot more confidence. The company has also completely rebranded itself, something which probably would have happened eventually but the audit team provided the expertise and focus to make it happen sooner.

“It’s still Phil and Ted’s but we’ve completely changed the look and feel of it and drilled down on the key elements of our brand, which was latent but we hadn’t done it in a coherent sense. So now our website talks to our catalogue and our catalogue talks to our product, and the product looks like the catalogue and vice versa.”

That may sound as though Gower has simply mastered the impenetrable language of branding and design but the rebranding has helped Phil and Ted’s position itself in export markets like the US where it is competing against companies with turnovers in excess of $1 billion.

The company can now talk to large distributors like Mothercare in the US, says Gower, “and they look at us and they say, ‘you’re a brand. We want to put five new brands in our store and you are one of them.’ We’ve got some tools now to help sell our brand and tell our story.”

The deal with Mothercare puts Phil and Ted’s products in 11 Mother-care stores across the US, or ‘doors’ as Gower calls them, and they’re about to expand into 30 stores. More importantly, Mothercare has 200 stores around the world, most of them in markets where Phil and Ted’s doesn’t have a presence.

And like the website says, Phil and Ted’s is about survival of the hippest. When the Sunday edition of New York’s Daily News ran a Father’s Day supplement about great gear for dads, right by the caption ‘what would be the hottest papa paraphernalia out there for Brad Pitt and his new baby Shiloh?’ was a whopping great picture of Phil and Ted’s e3 buggy. How cool is that?



Manawatu’s finest

A design audit was a good reality check for a Palmerston North company already in a state of transition

If the definition of exports includes anything paid for in foreign currency, then Manawatu Knitting Mills exports 70% of production. That’s counting goods sold in New Zealand to tourists, says managing director John Hughes. “One of our key targets is the tourism market in Australasia so our products are paid for in yen or US dollars or euros but the transactions happen to take place in Queenstown rather than Dusseldorf.”

But the company’s future lies offshore, initially in Asia, then Europe, then North America. It’s a case of having to, says Hughes, as Manawatu Knitting Mills makes the transition from a production-driven outfit — which was founded in Palmerston North in 1884 and spent the next century or so catering to a domestic market — to a design-led company. It will still produce garments for tourists in Australasia. And its high-tech approach means it can produce garments for the top end of the market in New Zealand. But that’s a small niche with a lot of companies trying to compete in the same space, says Hughes.

“The company has been around for 112 years but we’re dealing with a changing market. Imports have taken away our traditional base and the only way to survive is to export. We have to design products to appeal to a wider group than the domestic market which we traditionally focused on for the whole of the 20th century.”

Manawatu Knitting Mills has invested heavily in new technology to make the transition. The company, which employs 45 people, makes knitwear using natural fibres like angora, cashmere, merino and possum fur. Its labels include Lyle & Scott, Paihamu, Native World, Woolly Jumpers, Gentleman Farmer and Southern Isles. The new technology will allow it to churn out seamless gloves. It also wants to make seamless jerseys.

And it bought a Japanese three-dimensional computer design system which allows designers to simulate design and colour on models onscreen, then transfer the design to knitting machines.
But new technology, as Hughes drily observes, is just technology without the skills to make the best use of it. And there was a feeling the company talked about being market or design led without fully understanding what that entailed. The Better by Design auditors came in and unpicked every assumption, allowing Hughes and his team to step back and look where they were heading.

They already had a design component but a lot of it was based on the needs of a market that had changed dramatically. With the urging of the audit team, Hughes and his colleagues examined every aspect of design within the company, from garment design to strategic thinking, the way they fostered design, the way they developed it from a technical point of view and in an innovative sense.

“Understanding consumers is probably an area where we had made a lot of assumptions and the audit highlighted some of those areas that were assumptions. You need to verify the facts and figures and ensure they do stack up. The audit does that because they ask how you got information and whether the data does actually stack up.

“The audit highlighted a lot of areas, not just in design but the strategic direction of the company and all those issues that you need to look at when you’re going to take a different focus and become design driven. We talk about market led. For us it means enabling us to understand the ultimate consumer better and developing products for those consumers.”

Would they have gone through a similar process otherwise? Probably not, says Hughes, although they were already looking to evolve. But a small company worrying about day-to-day survival while attempting to predict the future just doesn’t have the same resources the audit team brought to the task.

“There are design companies you could go to but they would focus just on design skills. The audit team had management capability and took a holistic approach. The depth of the audit surprised us. From the design part of the company to senior management it’s a good reality check on where are we going and what are we doing.”



Built to last

Formway’s Life Chair is a classic example of the benefits of sustainable design. By Fiona Rotherham

Publicity over Formway’s successful Life Chair has been long lasting; it’s rather fitting when you consider the chair was specially designed to last. Launched in 2002, the chair is one of the first New Zealand-made products specifically designed to be easily adapted to changing fashion rather than thrown out. More than 250,000 of the chairs have now been sold worldwide.

It is a commitment to sustainable design that spreads beyond one chair to all the furniture made by the Lower Hutt-based company. Environmental manager Jake McLaren says the difference comes back to the key market drivers of design. At Formway that is good design, cost and environmental considerations. The catalyst for its sustainable product design, initiated in 1998, was growing demand from the export market, particularly Europe, for information on its ecological design and waste management. It’s giving consumers an added reason to choose a particular brand when competing on quality and price.

Primarily for office use, the Life Chair’s eco-design was based on three principles of sustainability: reduce, reuse and recycle. More than 90% of the chair’s components are recyclable, including the main structure, which is made largely from recycled aluminium. There are no fancy powder coatings on the metal that would tend to rub off and force it to be thrown out sooner.

The chair’s back is made from lightweight suspension fabric that can be replaced so the framework lasts longer. It was also designed with clips and pins rather than glue so it can be easily put together for transportation and reassembled in the country of sale, and easily taken apart again for refurbishing or for recycling when it reaches the end of its life.

One of the major considerations was the choice of materials, which were pared down to the minimum and ended up making the chair significantly lighter than its competitors at the time. “The overall concept is do we want to design something that’s heavy with lots of materials or something lightweight, streamlined and efficient through our choice of materials in the product?” says McLaren.

Using lighter materials can prove more expensive, particularly if they are new to the market, he says. There’s a premium to be paid for being an early adopter. “Even if that is the case, you may be in the same position if you innovate for other reasons.”