What happened was that Wal Mart came up to the folks at Master Lock and said, “We can make this same product in China for dirt-cheap. Either cut your price by 30% or we won’t give you shelf space.” Monday’s AIGA Los Angeles event at the A+D Museum ‘Master Lock and the Battle Against Myopia’ was a study of a company in crisis that found relevance through selling a brand over a commodity.
Scott Williams, tonight’s speaker, is a brand consultant whose work deals within industries where creatives are not the top dogs, and where designers have to consistently prove a return on investment. Master Lock had a product with no customer loyalty because their strategy had only been to produce padlocks. Consumers didn’t care if they bought a Master Lock or their next cheapest rival. Unlike other companies that found themselves in a similar crisis, they decided to build that loyalty.
The Financial Times reported that businesses that operate as a brand over selling just a product, or a commodity, do better financially. John Heppner, Master Lock’s CEO, hired the company’s first industrial designer and expanded the business to include steering locks, trailer hitches, bike locks and more. They went from working in the $400 million padlock industry to the $4 billion security-based industry. In the process they became the go-to name for protection and security, or a brand with loyalty.
Companies have to innovate because there’s no sure-thing in business. Williams pointed out Blackberry among other Fortune 500 companies that had massive potential yet somehow missed the boat. Bill Gates once said that Microsoft is always “two years away from failure.” It is his company’s mission objective to continually work in crisis mode and keep innovating.
Williams’ ending point was that these innovations take mavericks. Whether it’s somebody from management who recognizes “good design is good business”, like Heppner, or a designer who adopts a keen sense of business like Paul Rand.