The Science Of Desire - BusinessWeek Article

As more companies refocus squarely on the consumer, ethnography and its proponents have become star players

The satellite-radio war can't be won by Howard Stern alone. So shortly after signing the shock jock to a $500 million contract in 2004, Sirius Satellite Radio called on a small Portland (Ore.) consulting firm to envision a device that would help it catch up with bigger rival XM Satellite Radio Holdings. (XM) Ziba Design dispatched a team of social scientists, designers, and ethnographers on a road trip to Nashville and Boston. For four weeks they shadowed 45 people, studying how they listen to music, watch TV, and even peruse gossip magazines. Their conclusion: A portable satellite-radio player that was easy to use and load with music for later playback could be a killer app in the competition against XM.
Last November, Sirius began selling the Sirius S50, a device the size of a slim cigarette pack that stores up to 50 hours of digital music and commentary. It features a color screen and handy buttons that let you easily pick your favorite song to listen to. Slip it into a docking station and it automatically gathers and refreshes programming from your favorite Sirius channels. Techies praised the device, declaring it better than XM's competing player, the MyFi, launched in October, 2004. The S50 became one of the holiday season's hottest sellers. Sirius says it has helped the company sign up more subscribers than XM has since last fall. "[Ziba's] research capabilities and innovative approach to design concepts were most impressive," says Sirius President James E. Meyer.
A portable satellite radio from Sirius. Hipper, more user-friendly lobbies at hotels owned by Marriott International Inc. (MAR ) A cheap PC from Intel Corp. (INTC ) designed to run in rural Indian villages on a truck battery in 113-degree temperatures. All these brainstorms happened with the guidance of ethnographers, a species of anthropologist who can, among other things, identify what's missing in people's lives -- the perfect cell phone, home appliance, or piece of furniture -- and work with designers and engineers to help dream up products and services to fill those needs.
Companies have been harnessing the social sciences, including ethnography, since the 1930s. Back then executives were mostly interested in figuring out how to make their employees more productive. But since the 1960s, when management gurus crowned the consumer king, companies have been tapping ethnographers to get a better handle on their customers. Now, as more and more businesses re-orient themselves to serve the consumer, ethnography has entered prime time.
The beauty of ethnography, say its proponents, is that it provides a richer understanding of consumers than does traditional research. Yes, companies are still using focus groups, surveys, and demographic data to glean insights into the consumer's mind. But closely observing people where they live and work, say executives, allows companies to zero in on their customers' unarticulated desires. "It used be that design features were tacked on to the end of a marketing strategy," says Timothy deWaal Malefyt, an anthropologist who runs "cultural discovery" at ad firm BBDO Worldwide. "Now what differentiates products has to be baked in from the beginning. This makes anthropology far more valuable.
"Ethnography's rising prominence is creating unlikely stars within companies in retailing, manufacturing, and financial services, as well as at consulting firms such as IDEO, Jump Associates, and Doblin Group. Three years ago, IBM's (IBM ) research group had a handful of anthropologists on staff. Today it has a dozen. Furniture maker Steelcase Inc. (SCS ) relies heavily on in-house ethnographers to devise new products. Intel, in the midst of a wrenching transition from chipmaker to consumer-products company, has moved several of its senior social scientists out of the research lab and into leadership positions. "Technology is increasingly being designed from the outside in, putting the needs of people first and foremost," says Intel CEO Paul S. Otellini. "Intel's researchers are giving our designers a deeper understanding of what real people want to do with computers.
"With more companies putting ethnographers front and center, schools around the country are ramping up social science programs or steering anthropology students toward jobs in the corporate world. In recent years, New York's Parsons School for Design and Illinois Institute of Technology's Institute of Design have put anthropologists on the faculty. Ditto for many business schools. And going to work for The Man is no longer considered selling out. Says Marietta L. Baba, Michigan State University's dean of social sciences: "Ethnography [has] escaped from academia, where it had been held hostage."

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By Spencer E. Ante, with Cliff Edwards in San Mateo, Calif. -

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