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When the German philosopher Hans-Georg Gadamer died in 2002, at the age of 102, he was unaware of the impact he would posthumously have on mobile electronics, distilled beverages, and personal grooming, among other consumer-product categories. A giant in the field of phenomenology, Gadamer examined how human beings perceive and make sense of the world around them. He was celebrated for adapting hermeneutics—interpretive methods originally developed by Biblical scholars—to the study of human perception, but over his long career he also wrote about music, visual art, politics, medicine, and myriad other topics. He did leave some questions unanswered, however, such as: How can a low-end electronics company create products that wealthy consumers crave? And: What do women want in athletic gear?
According to two Danish strategy consultants, that was a lost opportunity. Gadamer’s hermeneutics aren’t only useful for understanding existence, argue Christian Madsbjerg and Mikkel Rasmussen; they offer insight into commercial questions as well. The two believe that Gadamer, his mentor, Martin Heidegger, French phenomenologist Maurice Merleau-Ponty, and any number of scholars considered abstruse even in the ivory tower can help companies solve some of their most complicated business challenges. To bring this form of problem-solving to theGeneral Electrics (GE) and Lululemons (LULU) of the world, Madsbjerg and Rasmussen built a consulting firm, Red Associates, around the Monty Python-like idea that corporate leaders need to channel their inner Heidegger.
“It’s applying very theoretical constructs to very concrete situations,” says Madsbjerg, a cultural theorist with the air of a precocious teen. “I think that’s the ultimate skill that’s here. I don’t think that the people that designed theories of identity ever, ever thought about toothbrushing, but it’s very, very helpful.”
Dustin Aksland for Bloomberg BusinessweekMikkel Rasmussen“I’m probably more practical. I’m more interested in how you use this,” adds Rasmussen, a cheerfully argumentative economist. “Christian is very much into Heidegger, and I understand why, because once you get down to what it is he’s really trying to say, it is really inspirational. It gives you a completely new idea about ‘what is it I do, and how do I study something?’ ”
Since opening its doors in Copenhagen a decade ago, Red has signed up some of the biggest companies in the world, including Intel (INTC), Novo Nordisk(NVO), and Beiersdorf (BEI:GR)(makers of Nivea skin-care products). Samsung Electronics relied on Red’s research in designing what would become the world’s best-selling televisions. Red helped Adidas (ADS:GR) unshackle itself from its focus on competitive sports so it could capture much of the exploding fitness and sports-lifestyle market. With the firm’s advice, Pernod Ricard (RI:FP)figured out how to sell more vodka in a world where fewer people are drinking in bars.
“The great thing about Red is that they’re supersmart,” says Mike Milley, the director of Samsung’s lifestyle research lab. “They are an unparalleled deliverer of that well-framed idea that’s going to help tell the story of what we need to do.”
Red’s 70 consultants, hired mostly out of graduate programs in sociology, philosophy, political science, history, and anthropology, conduct a form of ethnography, embedding themselves in the lives of consumers the way Margaret Mead did among Samoans. They interview their subjects and the people around them, itemizing the contents of their kitchens and dressers while photographing and videotaping, and accompany them as they prepare a meal, or commute to work, or primp for a night out. Then they sift the resulting information for weeks, even months, looking for connections and telltale behaviors.
Several years ago, Lego turned to the firm. In an attempt to compete against the immediate gratification of PlayStations, the company was marketing easier Lego sets, action figure lines, and jewelry kits that weren’t really about building at all. Yet Red’s research showed that, while kids love video games, many also love things that reward time and patience and, importantly, allow them to show off their hard-earned skills. In an example that has become Lego lore, Red found an 11-year-old German boy whose most prized possession was a pair of skateboarding shoes worn down in such a way that it was obvious to his fellow skateboarders that he had mastered a specific trick.
Those were the kids Lego should be courting, Red argued, and they didn’t want easy Lego sets, they wanted hard ones. The insight helped persuade the company to jettison much of its product line, part of a larger refocusing that has put it at the top of the toy industry.
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