Crafting is generally seen as an activity for kids or ... · With this total addressable market, we...

IIT Institute of Design I Service Systems Workshop I Spring 2015 I Roberto Faller, Hank Garrett, Anita Lee, Wenxi Wang

Crafting is generally seen as an activity for kids or older women or creative people, with a focus on individual activity and skill building.

Crafts are fun, silly, and simple.

Another way to look at crafting is that it’s is fun, silly, easy and simple enough that anyone can do it. It’s putting energy into your hands and taking a mental break.

Crafts connect people and unveil stories.

This kind of crafting can bring people together. When people make things as a group, they get out of their shells, share stories, and create personal connections. Let’s talk about a place where group crafting can be applied in a positive way.

The work environment is rigid.

Organizations and workplaces are rigid. Employees sit in cubicles. It’s uncommon to mingle with people from other departments.

Employees are isolated.

There are stories about serendipitous encounters by the water cooler, but do employees really spend much time at these hot spots? They spend their breaks on Facebook or eat lunch at their desks. They don’t interact anymore.

The OpportunityThe Opportunity

Teams need to connect to make something great.

However, these same isolated people need to work together. So how do we get them to bump into each other? How do we bring opportunities to start conversations and to have them click on a personal level?

The Opportunity

Crafting activities can soften the work environment.

Simple craft activities can bring people together to relax and enjoy the moment. Authentic relationships can be built through these playful and fun engagements.

The Opportunity

Passionate Crafters Craft Materials

+

Michael’s has the opportunity to bring crafts into the workplace. With access to a wide network of passionate crafters, who can become trained facilitators, and a dominant national position in crafts retail, to provide low cost materials, Michaels could reach new markets by connecting to employers with crafting engagements aimed at teams.

Presenting:

Biz Co.

For any small business, growing larger is a sign of success.

Web Department

Accounting

But the unfortunate reality of growing bigger is that the connections that were once so natural rapidly become harder to build. As departments grow and specialize, the distance between divisions also grows.

Jane is the manager of a newly formed team at this. The team is made up of people from different divisions, and it’s clear to Jane that they are going to have some challenges ahead if they don’t break the ice, and fast.

Luckily, Jane came across an article on FastCo that just might point to a solution…

sasvasv

WITH SIMPLE, QUICK, AND ACHIEVABLE CRAFT ENGAGEMENTS IN THE WORKPLACE, CLICK BRINGS NEW WAYS FOR EMPLOYEES TO CONNECT WITH EACH OTHER AND HAVE LASTING CONVERSATIONS.

By Harry Wilson

CLICK™: THE NEW WAY TO IMPROVE TEAM SYNERGY

a

“Crafting? that’s an interesting idea…”She is intrigued, and clicks through to the website to learn more.

aDiagnose your team Build team project Schedule engagement

Home Projects Testimonials ContactOur Team

Start Now

Office culture is what you make of it

Click! This might be just what Jane’s team needs to break the ice. It’s also cheap compared to the other team building events that she has seen.

“These googly eyes have made my office full of conversations. My friend in another department found them to be so fun and now their team is also making their own googly monster buddies.”


Team size

Testimonials

“It is really a great icebreaker. My colleagues and I never had so much fun together!” Thoughtservice Inc., Jose B.

“Got to know my friends a second time. SweetWeb Inc., Jose B.

On the website, she sees stories from other managers like her of successful crafting engagements that really got teams started on the right foot.

Show Matches

What does your team need? Select all that apply.

Diagnose your team Build team project Schedule engagement


Team size Select all that apply.

Time Select one.

Team Identity Communication Collaboration New Energy

Hi, Sharon.

< 1 Hour

1-2Hours

2-3Hours

3+Hours

6

She clicks through the product customizer see what activity they recommend for her particular needs.

Diagnose your team Build team project Schedule engagement


Fuzzy Play Nothing brings more happiness than playing with fuzzy balls. It is easy while it makes a big

difference to teams. 6 member group Easy level Within 1 hour

Schedule Now

Your Ideal Activity

Your FacilitatorMay C. Starting at age 8, May started creating her own clothes. Over time as her grandmother taught her tips and helped her realize that over time, the softest and most simple materials can be transformed into something delightful. Teamwork and

After a few quick questions, the website spits out a recommended kit, and tells her about the crafting coordinators- passionate crafters who come in to help facilitate a crafting session that would get her whole team making things together and having a fun shared experience.

Wednesday afternoon comes, and Jane greets Cheryl, the crafting coordinator. She sets up with the team and introduces herself along with the activity they will be doing to start out.

Cheryl is a long-time crafter who is really excited to share her passion for making. Through her training as a craft coordinator, she has the skills to help get people out of their shells and having fun as a group.

Cheryl is great at keeping the energy up, and she is quick to help get the team in the right mindset for the activity. She encourages everyone to get silly and relax while making a self-portrait of their teenage selves out of pipe cleaners, pom-poms, and googly eyes.

Once the crafting begins, the team starts interacting like they never have before. Laughter and conversation fill the conference room, and the whole group is clearly bonding over their crafting creations.

After the ice breaker exercise, the team is divided into groups for a fun competition. They make catapults out of popsicle sticks, and compete for the longest launch. As the projectiles fly, Jane sits back and marvels at how well her team is working together to creatively solve a problem. Cheryl does a great job of tying the activity back to their team dynamic and the best ways to work together, but without getting too serious or preachy.

Talk of the successful crafting session gets around the office, and everyone wants to try the activity themselves. Jane gets major props for visibly improving her team’s dynamic and quality of work. Soon, other managers are giving Click a shot with their new teams.

Better office relationships not only improves the company’s culture, it has a real impact on the way people work together in the office.

Where people from different departments once had a hard time connecting with one another, now the divisions in the office are breaking down. All thanks to the informal and fun team building opportunities that Click provides.

Whole office is clicking with crafts.

$300 total cost to

company

$50 cost per

participant

6 participants

× =

$45 cost of materials

& delivery

$60 facilitator pay

$105 total cost to

Michael’s

+ =

$195 Michael’s profit

per engagement

For a two-hour Click engagement…So how does Click work? For Jane the manager, she can justify this cost For Cheryl the coordinator, she gets to make a nice chunk of cash for a few hours work.

Year 1 Financial Model

0.5% reach

18,000 establishments

in year one

359,902 total mid-sized firms

in the US

=×

8 engagements

per year

14,396 engagements

in year one

18,000 establishments

in year one

=×

With this total addressable market, we expect a modest reach in year one. With 8 team engagements per office, we get 14 thousand total.

Year 1 Financial Model

$2.8M gross profit

$195 revenue per engagement

14,396 engagements

in year one

=×

$2M Michael’s net profit

$780,800 total

fixed costs

product development: 4%sales & marketing: 43%

administrative & training: 53%

Because Michael’s is already set up well for this sort of business, the net profit is quickly in the black.

thank you

IIT Institute of Design I Service Systems Workshop I Spring 2015 I Roberto Faller, Hank Garrett, Anita Lee, Wenxi Wang

Appendix

Retailing in United States Founded in 1962, by Michael J. Dupey Carl Rubin, CEO www.michaels.com Headquarted in Irving, Texas

1040stores in USA and Canada

115 Aaron Brothers Stores

18,200ft2 selling space

48,900employees

$4.41B revenue

$712Moperating income

$1.54Bassets

$214M profit

Michael’s Overview

Extensive distribution Acquires, distributes, and carries a wide range of crafting materials such as arts, crafts, framing, floral, wall décor, bakeware, beads, scrapbooking, and seasonal merchandise.

10 exclusive private brandsRecollections, Studio Decor, Bead Landing, Creatology, Ashland, Celebrate It, Art Minds, Artist's Loft, Craft Smart and Loops & Threads. Network to passionate crafters Access to a large group of crafters with communication channels

“Crafters are significantly more likely to be female, have larger households, have children, and be younger than non-crafters.”

• 72% are female • 42% have children • Avg. 2.94 people/household • Median age between 35 and 44 • 47% report being crafters for more than 10 years

Reached Market Core Capabilities

Michael’s Overview

Sponsors Bain Capital Partners The Blackstone Group Board of Directors

ShareholdersC-Level Buyers Planners Architect/Retail Design Sales Associate Managers Web Developers/IT In-house Designers Framers PR/Marketing

Employees Partners/VendorsSuppliers Martha Stewart Chef Duff Wilton Printers (Circulars/Products) Advertisers CreativeBug Blogger Community

CustomersHobbyist Home decorators Etsy shop owners Occasional craft makers Party planners Families Couples Teachers

Stakeholders

5 In-depth Interviews Recruitment Participants covered a wide range of crafters like artists, designers, home improvers, and hobbyists. They were contact by email or phone. Three interview were conducted in the participant's house or workplace so observations could be made.

Tools used: + Photographic / Video Camera + Notebooks / Note Taking + Audio-recording + Artifacts for research stimulus

Primary Research

Other research activity: + Store Observations + Michael’s store workshops

“I can learn a lot of great skills while expressing myself and take it to another level.”

Stacy* *Names have been altered for privacy.

Primary Research

“Creating is just who I am. I believe in making every part with my own hands. A lot of love and obsession goes into my dolls.”

Jake*

*Names have been altered for privacy.

"A tool is not just a thing. If I'm lending you a tool it's like my right hand that I'm giving you for the time being."

Dennis* *Names have been altered for privacy.

"It's addictive and empowering as a designer and a craftsperson, just because you can do things that you couldn't otherwise."

Steve* *Names have been altered for privacy.

Primary Research

“Make it homey."

Jane and John* *Names have been altered for privacy.

Primary Research

User Journey

Data Analysis and Modeling

• Crafters are driven by a spectrum of emotions that lead them to start projects.

• Early exposure can blossom later into deep interests and future— materials, tools, needs, people, environments, and emotions.

• Framing the lack of resources, materials as a true challenge and a quest to learn techniques can help completion of the project.

• Motivations can come from two distinct ends of the spectrum, from “Make to Think” to “Make to Feel”.

• Project inspirations can come from interests outside of just crafting - science, engineering, art, hobbies, and design.

Insights

Data Analysis and Modeling

Individuals who are going through a “transitioning” phase face barriers that prevent them seeing crafting as an opportunity for positive emotional development. Further barriers prevent them from turning the spark of inspiration into a concrete crafting project or goal. We aim to position Michael’s as the catalyst from an unsettled state to a more positive emotional space.

Change of Environment

e.g., new city, new job

NegativeState

e.g., break up, death

New Relational

Role

e.g., father, husband

Opportunity Focus

Emotional Transitional Moments

Opportunity Definition

Concepts Generation


April 6, 2015 Deployed on 4th Floor of IIT Institute of Design

Participants were invited to sit in a table full of crafting materials. They started by choosing a prompt (create your nemesis, create a your best friend, etc) and then they could craft and send picture of their creation with their thoughts. Also, participants received an envelope with instructions and a prompt. They also could send feedback by cellphone messages.

Pilot 1

Key observation: Craft materials were played with weeks after even if they were not used during the scheduled prototyping session. Random creations appeared over time.

The word “craft” scares many people. They are either confident that they can make something creative or not. Others did not like the material choice or the colors. They wanted something more “mature”. People develop a high barrier to crafting overtime.

Prototyping

Prototyping 1 IIT Institute of Design

My friend is just frustrated and stressed over the “assignment”. She says she’s no good at this and does not have the tools. She does know what to do.

Pilot 2

My coworker’s buddy is attacking mine!!! Her friend is my foe.

I love crafts! This is elmo and he encourages me throughout the day. He makes me laugh and smile.

Emily said that she was first frustrated with what to do but then it made her laugh and was glad she did it.

Overall the response was, “We want more.” After sending pre-made kits with an instructional card, prompt, and an explanatory response, the feedback was overwhelming positive and informative of the type of learnings that an employer/employee and the team was able to gather.

April 6-7, 2015 CPS Primary School and Aon Hewitt by an employee Key observation: People started engaging the crafts immediately when spotted. Some people wanted more specific directions. The small amount of time needed to finish the project was appreciated as well as it becoming a personal expression and fun way to dress up the office and desks.

Prototyping

Prototyping 2 CPS Elementary School & Aon Hewitt

Step Sharing

Quality Measure

Ads are enticing

and explain the

service

Contact is

friendly and

communicates

the service

value

Website is

attractive and

easy to navigate

Website is easy

to navigate

Website is easy

to navigate

The registration

process is easy

and safe

The purchasing

process is easy

and fast

Can easily

make changes

to existing order

Package

handling is fast

and easy to

track

Package is easy

to track and

transportation is

safe and fast

Package arrives

on schedule and

without damage

Email is

appealing

Instructions are

easy to follow

Website is

attractive and

easy to navigate

Physical Evidence

Website, Social

Media, Ads

Phone Website, Phone Website Website Website Website, E-mail Website, phone Website,

Package

Website, Truck,

Package

Package,

Company

Email Kit materials,

Instructions,

Roadmap

Social media,

boards,

"Successful

Stories" website

Receive emailParticipates in

activity

Post results on

social media

and/or

"Successful

Stories" website

Get in contact

with website

"Successful

Stories" in

social media /

adds

Access website

"Successful

Stories" to learn

about the

benefits of Click

Diagnose team

problems to get

a suggestion for

a crafting

activity and a

facilitator

Customize

activity and

schedule visit of

crafting

facilitator

Input personal

data and

payment

method

Finish purchase

Make changes

to an existing

order or cancel

order

Receive

package

Invite

participants

Registration

System

Check Out

system

Receives phone

call and change

order

Get in contact

with Manager to

explain the

service

Craft facilitator

inspire crafting

and facilitates

activities

Curate

"Successful

Stories" website

Gather data

about

costumer’s

preferences

Manage

personal

information

Register Order

and send

confirmation e-

mail

Register

changes to

order

Marketing

develops ads

Identify

companies

Develop content Develop new

types of kits

and keep stock

Website

displays product

information,

reviews, and

similar products

for website and

do maintenance

Prepare

package and

dispatch

Promotion by

3rd parties

Delivery

company

receives

package

Transport

packageDeliver package

Awareness / Purchase Group Activity

Customer

Activities

Employee

Manager

Line of Interaction

Onstage

activities

Michael's

Technology

Click's Employee

Line of Visibility

Backstage

activities

Michael's

Technology

Click's Employee

Line of Internal Interaction

Support

Process3rd Party

Service Definition

Service Blueprint

TAMU.S. Mid-sized Establishments(100-499 employees) 359,902

Mid-size paid employees 17,547,567

Average employee number per firm 194

for our own reference 2% market share (total # of firms) 7198

# of 6 person teams 2924595

% of 6 person teams 29246 1%

Fixed Cost for 100 companies

Talent Additional cost for talent sales and marketin Design Talent

Cost $40.00 $40

Hour 40 40

Weeks per year 52 10

total employees 2 1 TOTAL talent cost/yr: total talent cost/mo:

Annual cost $166,400.00 $16,000 $182,400.00 $15,200.00

Incentives COGS Per unit

Unit Cost $20.00

Variable Cost RevenueIndividual Kits COGS Per unit retail cost per unit markup: 200%

Cost of materials $0.25

Packaging and printed materials $0.15

shipping $0.25

unit total cost $0.65 $1.30

Team Boxes COGS Per unit


packaging and printed materials $8.00

shipping $5.25


50 companies sales COGS retail

Tier 3 engagment Individual Kits 582 $378.30 $756.60

Team Boxes 16 $692.00 $1,384.00

Office work engagements 2 #REF! #REF!

#REF! #REF!

Forecast- Team Boxes

Year 2015 2016 2017 2018 2019

number of businesses 29246 35095 49133 58960 70752

Revenue per business $2,529,774 $3,035,729 $4,250,021 $5,100,025 $6,120,030

Cost per business $1,849,806 $2,219,767 #REF! #REF! #REF!

Gross profit $679,968 $815,962 #REF! #REF! #REF!

fixed costs $182,400.00 $182,400.00 $182,400.00 $182,400.00 $182,400.00

Net profit $497,568 $633,562 #REF! #REF! #REF!

Click Financial Model

Service Definition

Financial Model: Total Addressable Market

TAMU.S. Mid-sized Establishments(100-499 employees) 359,902

Mid-size paid employees 17,547,567

Average employee number per firm 194

for our own reference 2% market share (total # of firms) 7198

# of 6 person teams 2924595

% of 6 person teams 29246 1%

Fixed Cost for 100 companies

Talent Additional cost for talent sales and marketin Design Talent

Cost $40.00 $40

Hour 40 40

Weeks per year 52 10

total employees 2 1 TOTAL talent cost/yr: total talent cost/mo:

Annual cost $166,400.00 $16,000 $182,400.00 $15,200.00

Incentives COGS Per unit

Unit Cost $20.00

Variable Cost RevenueIndividual Kits COGS Per unit retail cost per unit markup: 200%


Packaging and printed materials $0.15

shipping $0.25


Team Boxes COGS Per unit


packaging and printed materials $8.00

shipping $5.25


50 companies sales COGS retail

Tier 3 engagment Individual Kits 582 $378.30 $756.60

Team Boxes 16 $692.00 $1,384.00

Office work engagements 2 #REF! #REF!

#REF! #REF!

Forecast- Team Boxes

Year 2015 2016 2017 2018 2019

number of businesses 29246 35095 49133 58960 70752

Revenue per business $2,529,774 $3,035,729 $4,250,021 $5,100,025 $6,120,030

Cost per business $1,849,806 $2,219,767 #REF! #REF! #REF!

Gross profit $679,968 $815,962 #REF! #REF! #REF!

fixed costs $182,400.00 $182,400.00 $182,400.00 $182,400.00 $182,400.00

Net profit $497,568 $633,562 #REF! #REF! #REF!

Click Financial ModelService Definition

Financial Model: Fixed & Variable Costs

Financial Model: 5 Year Forecast

Service Definition

Presentation http://www.verandahmagazine.com.au/wp-content/uploads/2014/11/knitonepurlone.jpg http://static.guim.co.uk/sys-images/Money/Pix/pictures/2014/9/29/1411998763844/open-plan-office-014.jpg https://www.workspring.com/wp-content/uploads/2014/06/Elledge_130107_3141_SC_WS_1949.jpg “Calendar” by Bram van Rijen, from the Noun Project. “Frame” by Bram van Rijen, from the Noun Project. “People” by Daniel Llamas Soto, from the Noun Project. “Cast-On” by Aenne Brielmann, from the Noun Project. “String” by Claire Jones, from the Noun Project.

Appendix http://cdn.mallmaverick.com/system/stores/store_fronts/000/004/377/original/michaels-logo.jpg?1382114165 http://crooksandliars.com/files/primary_image/14/04/michaels_arts.jpg http://www.510families.com/wp-content/uploads/2013/11/michaels-craft-class.jpg http://www.trbimg.com/img-52e42bf5/turbine/chi-michaels-store-warns-of-payment-card-breac-001/2000/2000x1334 http://www.makeit-loveit.com/wp-content/uploads/2011/07/Gaylord-Texan-332-of-611-1-670x446.jpg http://momspotted.com/wp-content/uploads/2014/05/Michaels-3.jpg

Sources

http://www.verandahmagazine.com.au/wp-content/uploads/2014/11/knitonepurlone.jpg

http://static.guim.co.uk/sys-images/Money/Pix/pictures/2014/9/29/1411998763844/open-plan-office-014.jpg

https://www.workspring.com/wp-content/uploads/2014/06/Elledge_130107_3141_SC_WS_1949.jpg

http://cdn.mallmaverick.com/system/stores/store_fronts/000/004/377/original/michaels-logo.jpg?1382114165

http://www.510families.com/wp-content/uploads/2013/11/michaels-craft-class.jpg

http://www.trbimg.com/img-52e42bf5/turbine/chi-michaels-store-warns-of-payment-card-breac-001/2000/2000x1334

http://www.makeit-loveit.com/wp-content/uploads/2011/07/Gaylord-Texan-332-of-611-1-670x446.jpg

Crafting is generally seen as an activity for kids or ... · With this total addressable market, we...

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