Volume 50: The Missing Link Between Strategy & Design.

1. The missing link between strategy and design is entirely conceptual.

tl;dr: The missing magic of conceptual creativity.

I was on a call with the President of a branding agency the other day, and we were talking about how the work has become so small c conservative, and why. It’s something I’ve written about before, but it struck me afterward that one of things we don’t talk enough about is the extreme absence of conceptual creativity that seems to exist within modern branding.

Why is that you might ask? Well, perhaps one of the issues has been the splintering of strategy and design in the branding world in recent years, even within the same firm.

If we start in the pure design field there’s long been a dearth of conceptual creativity at play, being as there is, a tendency for designers to mistake craft for creativity. This is why even storied design agencies like Pentagram can be unmatched in their ability to simplify, craft and modernize existing identities, while also being abjectly awful when it comes to creating something new. It’s not the lack of craft that’s the problem, it’s the lack of anything even remotely approaching a conceptual idea. (As an example, and I only mention this because they were generous enough to share their thought processes publicly, the fact that Pentagram explored category level metaphors and knots and ropes when designing the identity for Slack, rather than seeking conceptual ideas based on what Slack means as a brand illustrates exactly the problem in action. It’s what Donald Rumsfeld famously described as an “unknown, unknown”. In this case, a critical element they didn’t even know was missing.)

On the flip-side, we see an equal but opposite problem occurring in the strategy space, with strategists attempting to become either as literal and management consultant-lite as possible, or choose to play in a purpose-lite land characterized by fantastical thinking. But either way, both tend to deliver work that seems like it’s being bought by weight rather than quality of thinking. I’ve become sadly numb to the number of strategy decks I’ve seen clocking in at over 100 slides that barely make sense let alone say anything important. Worse, neither the management consultants-lite nor the fantastical, magical thinkers seem capable of creating ideas that even approach a conceptual foundation from which a design team might build from, being much more likely to confuse than to liberate. Which in turn leaves a gaping conceptual gulf in the middle. (Any designer who’s ever received a briefing from a strategist they could neither make sense of nor sparked a single inspiring idea has experienced exactly this in practice.)

As a result, the net result is a gulf that tends to then be filled with a copycatting of what other brands have done rather than anything original, because it’s not clear what the original ideas should be, what they should build from, or whose responsibility they even are in the first place.

Now is this all negative? Not at all. Rather it acts as a roadmap for the future. You see, the opportunity has never been clearer. Those who will stand out moving forward will be those that can best integrate strategy and design in a way that doesn’t just reflect excellence in their respective fields, but that overtly connects the dots via strategically led and conceptually creative ideas that serve to push the brand forward in interesting new ways.

It’s not really that hard. But it does require us to actively consider a vastly less siloed approach to the work, and to get much better at demanding of each other a deliberate framing of the conceptual connection points between the strategy for a brand and how that brand should then be manifest through design.

3. Amazon makes its long anticipated $2 trillion dollar healthcare play.

tl;dr: Amazon brings a howitzer to a knife fight.

Amazon is one of those businesses that operates at such immense scale that there are only a tiny number of very large untapped markets remaining that have even have a chance of making a difference to their overall market value.

That’s why the prospect of Amazon disrupting the $8.45 trillion dollar US healthcare market has been telegraphed for some time. First they established a joint insurance venture with JP Morgan and Berkshire Hathaway, then they acquired PillPack and created Amazon branded over the counter medicines, and then this week Amazon made their biggest move yet by entering the prescription drugs business.

There is little doubt the US healthcare industry is in desperate need of disruption. It’s vast, vastly inefficient, and utterly byzantine in its complexity. All things that have led to tremendously deep profit pools for purveyors of the status quo, with almost zero incentives to meaningfully drive down prices. Until now.

(As an aside, the price hiking antics of now behind bars “pharma-bro” Martin Shkreli, while being publicly excoriated at the time, was simply a vanishingly small example of a much broader pattern of price gouging in pharmaceuticals, led largely by private equity companies).

Overall, Americans spend somewhere in the region of $360 billion dollars yearly on prescription medications. Largely through an increasingly concentrated supply chain that is dominated by just a very few, very large corporations with a strong incentive for prices to remain high.

Enter Amazon, with its tremendously powerful consumer brand, control of the last mile, low price mentality, and 110m Prime members. Not just content to compete, Amazon is out to win by sparking a bloody price war, offering free two day Prime delivery on generic drugs for an absolutely eye watering 80% less. (Even branded drugs will be 40% off). Now, this doesn’t just set out an aggressive pricing environment for the rest of the industry to try and match, but also creates a huge incentive for many of the 200m+ Americans who aren’t yet Prime members to sign up.

So, what are the stakes? Well, they’re huge. Aside from the obvious consumer benefit reduced prices create, the impact of success on the Amazon stock price is likely to be significant. When Amazon disrupted retail, the decline in the market capitalization of major retailers matched almost exactly the gains made by Amazon. If something similar happens in the pharmacy business, we could see somewhere north of a $60bn gain, which would make Amazon the world’s first $2trn company.

(Please note that I am neither an investment analyst nor even generally competent in basic arithmetic. I made these calculations on the back of a cigarette packet with a crayon and you’d be daft as a brush if you chose to take this as investment advice).