In his seminal 2004 article The Design of Business, Roger Martin helped usher in a new management zeitgeist focused on infusing business professionals with the sensibilities and tools of a designer. "Businesspeople don’t just need to understand designers," he wrote. "They need to be designers.” Design thinking remains quite the rage, with companies and business schools alike embracing it as a fresh take not just on how to rethink key products and services, but also how to reframe everyday processes and projects.

Now comes frog senior designer David Sherwin with the yang to Martin's yin, a book on the business of design, called Success By Design: The Essential Business Reference For Designers. Sherwin's primary goal is to help anyone in design to become a better businessperson.

"Some processes can be put on the shelf," he writes. "But the business process - that’s what keeps us up and running. For the sanity of both co-workers and clients, it can never be sacrificed. Never."

The book has three main parts:

1. Working With Clients
2. Managing Your Projects
3. Operating Your Studio.

It's chock full of practical insights, tools, and techniques, and lives up to its billing as an essential reference.

I found the following handful of insights and perspectives on the intersection of design and business to be among Sherwin's most compelling.

On Leadership

The design leader is a special animal in Sherwin's view, as he or she must master two domains: the craft of design, and soft skills of business leadership. He suggests a model merging both, called "The Six C's of Creative Leadership": conjuring compelling design, communicating actively, coaxing stellar work out of the creative team, compelling their teams to realize a vision, cajoling through critique using open-ended questions, and cheering the team on by publicly promoting their work.

"Much like a kung fu disciple, who must climb the tall mountain peaks in order to find the secret dojo where he can learn a particularly rare fighting style, many design leaders must mature in their craft before they can realize their leadership skills under the right mentor. Some of these skills are not easily teachable. They are behaviors that a design leader must infuse into his daily work habits. At the same time, a design leader must be aware of the same skills and behaviors she is trying to grow in the people that she manages."

On Strategy

The consumer and market demand for high design has given design firms like IDEO and frog a seat at the strategy table once reserved for management consulting firms. Many argue that design firms are the new management consultants.

"This is a good thing," writes Sherwin. "With the ongoing expansion of design’s role in business, today’s designers are helping to solve problems that transcend mere decoration and instead impact the core functions of a client’s business. But in our haste to be strategic partners, we’ve added a host of new services to our capabilities that we may not fully understand: Design strategy. Brand strategy. Content strategy. Interactive strategy. Media strategy. Business strategy. We may have overstepped our reach."

Sherwin calls on the work of well-known business strategists as well as resident frog design strategists to arrive at three conclusions regarding strategy and design:

• Design strategists have an interpretive role; they must speak fluently about various disciplines such as business, marketing, technology, design and culture.
• Design strategy works with design research; good strategists understand how to translate the information gleaned from research into insight.
• Design strategists focus more on the framing than on the actual design making; they may not execute designs, but they collaborate with teams to generate design ideas.

On Process

Sherwin makes the point that the "tidy charts" displayed on design firm websites and in marketing collateral in an attempt to illustrate how they produce their work is simply the designer's attempt to fuse creative process with some semblance of a business process.

"But do studios actually follow these processes to the letter?" he asks. "Do they have an in-depth manual they use to guide their designers through Step 4A? Do clients swoon at the process diagrams when you’re competing for a project? Or is this packaging of process solely a way to pitch and secure business?"

The implied answer to the last question is yes. "Instead of establishing and following rote guidelines for how to design and sell your firm," advises Sherwin, "become a perpetual student of your process so you can design the design process. Each time I design a project, I learn something that I fold back into the process, changing how I may approach design in the future."

On Politics

Sherwin cautions designers not to overstep their bounds. Only if a design client specifically asks to craft company strategy should the designer consider doing so. However, it would be remiss for a responsible designer to blindly follow company strategy without challenge if that strategy was deemed to be fundamentally flawed.

"In most cases," writes Sherwin, "You will know less than your clients about the business strategies they are executing out in the market. And if you do have more knowledge, then you don’t want to be the therapist who on the first appointment with their new client says, “You don’t have to tell me any more. Quit your job, go back to school. By the way, your boyfriend is cheating on you, so move out now. Competing political priorities can cover up the most innovative design solution in the same way that dust dulls a diamond. If you help your client sweep away the political debris throughout the design process, your work will sparkle just as it should."

On Culture

To the non-design business person, there is something mystical about the design studio culture. Many traditional companies strive to replicate the atmosphere of the studio, hoping to inspire and encourage creativity and innovation in their organizations.

Sherwin talks about culture in terms of building blocks: hard blocks and soft blocks. Hard building blocks are things like space, amenities, training, and the type of work conducted--all things that are part of business overhead, and can be realized by allocating time and money for them in a budget.

Soft building blocks are those created by employees through their daily decisions, and include things like philanthropy, community, ownership over work, challenging projects, leadership, and recognition.

As Sherwin argues: "A studio’s culture is not created solely by the business owner. For a design business, culture is generated from ongoing contributions and discoveries from both studio owners and employees. A healthy studio culture draws equally from both sides. Don’t assume that your studio’s culture will grow organically over time. Leave spaces for your team to tailor the studio’s physical space and workday to their own interests. Otherwise they won’t be able to fully express themselves at work - and over time, they’ll be punching the clock with frustration."

While these are some of the more high-altitude takeaways, Sherwin covers all the bases, at all levels: proposals, contracts, design briefs, project management, time sheets, hourly rates, and even such mundane but critical elements like insurance and accounting.

There's no better resource on the business of design than Success By Design.

(Note: this article appeared first in Fast Company Design.)

What do the Mona Lisa smile and the Wall Street Journal have in common?

They both employ a design principle related to subtraction and minimalism. By limiting information, they engage the imagination.

In the case of the Mona Lisa, Leonardo da Vinci purposefully blurred smile lines around the corners of Lisa’s mouth and eyes, the two most expressive parts of the human facial anatomy. The artist called the technique sfumato, meaning “like smoke.” The Mona Lisa smile captivates us because, in the absence of a clear expression, her attitude is open to interpretation. The viewer supplies it, projecting their own mood onto the painting. That’s why the Mona Lisa smile is different each time you look at her.

Leonardo advised aspiring painters, “Paint so that a fumoso [smoky] edge can be seen, rather than hard and harsh outlines and silhouettes . . . that is, more confused--that is to say, less clear.”

In the case of the Wall Street Journal, all you need to do is catch a glimpse of one those tiny, fascinating yet minimal portraits embedded in the columns to know that someone five rows ahead of you on the plane is reading the Journal. Made from countless little dots that form an utterly photorealistic image, those images have come to be the newspaper’s trademark.

It’s called a hedcut and was created by Kevin Sprouls in 1979. Here’s Sprouls by his own hand.

For most people, the hedcut is far more engaging than the actual photo. It makes you lean in and ask, "How did they do that?"

I contacted Sprouls and spent a good bit of time chatting with him to understand his methodology, because his iconic style is a good metaphor for the way limited information can be used to create clarity far more compelling and indelible in the viewer’s mind than something perfectly concrete and complete.

I also asked him to produce a hedcut portrait of me and provide me with a step-by-step visual walkthrough showing the interim stages of completion. His process begins with a black-and-white photograph. “I print out the grayscale image and transfer the photo’s information onto illustration board by tracing on the photo,” the artist explains. “The resulting contour drawing is like a map for me to follow. Everything is done by hand, one mark of the pen at a time.”

He then begins the six-hour, step-by-step incremental process of placing dots meticulously on the illustration board. Clothing, hair, and eyes are the most challenging, and so Sprouls focuses his attention there first. “Get that framework right,” he says, “and the rest is a matter of, um, connecting the dots.”

You can see the progression in the image above.

“What constitutes a good quality portrait in this style is the structure of the dot field,” Sprouls says. “To produce that tonal effect, I align the marks into a grid matrix.” Words like framework and alignment carry great weight in the business world, and beyond the fascinating design aspects, there are three key business lessons to take away from a hedcut portrait.

1. FRAMING IS EVERYTHING

The first takeaway revolves around Sprouls’s pre-step of getting the starting point just right. Getting the proper first image--one with enough vivid detail to enable a clear endgame--is key. Too often in life people fail to recognize success because they haven’t visualized it beforehand.

There’s a reason everyone talks about “the big picture”; it’s difficult to remain fully engaged without it, because our daily work is really about putting a little dot down each day, metaphorically speaking. Something needs to guide us in connecting those dots. If you are missing the mark, so to speak, you can usually trace it to a glaring absence of a compelling mental image to guide the effort. Pictures connect the right brain with the left and help us see the path more clearly.

The power of this principle at work was on display when the 2010 earthquake hit Haiti. There were no street maps of Port-au-Prince. An organization called OpenStreetMap.org had satellite maps--a framework outlining the streets--but they lacked street names, which were sorely needed during the crisis. People from all over the world, predominantly expatriate Haitians, contributed the names so that the map filled up. The map was used by everyone from the U.S. Marines to the World Bank to the United Nations--people connected the dots and completed the picture, which sped up the rescue and relief efforts enormously.

2. ADDITION THROUGH SUBTRACTION

The second lesson is that when you carefully remove just the right things in just the right way, something good happens.

Designers of the automotive youth brand Scion essentially took this lesson to heart in creating the fast-selling and highly profitable xB model, a small and boxy vehicle made intentionally spare by removing hundreds of standard features in order to appeal to the Gen Y buyers who wanted to make a personal statement by customizing their cars with trendy options.

As an adviser to Toyota, I witnessed young buyers invest thousands of dollars to customize their $15,000 xBs with dozens of expensive aftermarket additions, including flat panel screens, carbon fiber interior elements, and high-end audio equipment. In several documented cases, the price tag of the accessorizing equaled the original investment. Sales were so strong dealers sold out as soon as the cars hit their lot.

But it was never about the car as much as what was taken out of it.

3. NO SHORTCUTS TO SUCCESS

A third lesson concerns the discipline and incrementality of the work. If you scan the web, you’ll find many people who have tried and failed to reproduce Sprouls’s technique in ways that shortcut the talent, skill, and painstaking effort required to produce his art.

They are trying to eliminate the wrong thing: craftsmanship.

They want the final result in one big leap, with the punch of a few computer keys. They want someone, or something, to do the work for them. They want the breakthrough effect without the hard work that goes along with it. Too often we seek the grand-slam homerun and forego the groundball single that gets us on base.

Creativity and innovation in any field is a discipline of increments. Ultimately, all the small steps reveal something altogether new and novel. Too often in work and life we force what amounts to a false choice between small steps and big jumps. It isn’t about choosing one or the other. It’s about achieving major impact by making relatively insignificant decisions along the way.

The late great John Wooden had it right when he said: “When you improve a little each day, eventually big things occur. Don’t look for the big, quick improvement. Seek the small improvement one day at a time. That’s the only way it happens--and when it happens, it lasts.”

Sprouls’s work is a systematic pursuit set on achieving the maximum effect with the minimum means. If everyone took his basic creative approach, we wouldn’t be dealing with so much excess everything.

THE “SQUINT”

In his book The Laws of Simplicity, RISD President John Maeda describes “the squint”: “The best designers in the world all squint when they look at something. They squint to see the forest from the trees--to find the right balance. Squint at the world. You will see more, by seeing less.

I asked Sprouls if he squints a lot. I asked him in all seriousness. “Absolutely I squint, and I’ve got the wrinkles and reading glasses to prove it,” he joked. “But seriously, yes. Squinting shows you what to pay attention to, what to ignore. It helps me know when and where to add something, or leave well enough alone. This work, and I guess any work if you think about it, is a constant process of focusing and unfocusing of my eyes, working up close, then standing back, little details and the big picture. Or it should be, anyway.”

Few people have the design chops of Kevin Sprouls. But everyone has the ability to connect the dots.

Charles Darwin was on to something. Business innovation has a lot in common with his theory of evolution, about the origin of species.

Oh, but how easily we forget, neglect, and even disrespect evolutionary innovation, and how easily our attention is riveted by ever-so-sexy revolutionary innovation.

Allow me to unpack the parallels between Darwin's theories and business innovation a bit. I see a few important touchpoints.

First, there’s Darwin's notion that everything can be traced to a common ancestry. Business translation: every idea has elements of the past. Take Henry Ford’s famous assembly line, which revolutionized manufacturing. It was in reality one part continuous flow borrowed from mills and canning factories, one part standardized parts borrowed from machine tooling, and one part conveyor belts borrowed from meatpacking and brewing industries. Mix, stir, bake.

Second is Darwin's idea of similar traits converging into one new organism. That’s smartphone technology, which combines telephony, software, text messaging, email, internet browsing, voice recording, music, touchscreen, video and photography. Convergence is everywhere.

Third is Darwin's survival of the fittest, which says failure to make small adaptations leads to extinction. It's the difference between Blockbuster and Netflix. It's why Adobe will no longer sell its Creative Suite as something you can own. The subscription model is what's next. Hard media is all but extinct.

All of which is to say, there’s not much new under the sun. Most of the so-called revolutionary breakthroughs are in reality smaller ideas combined, synthesized, and adapted to a new application. It’s nearly impossible to find a big innovation that isn’t based on something else already in existence.

Da Vinci's Dilemma

Let's think about the lone genius for a minute. Leonardo Da Vinci was never at a loss for big, original ideas. Brilliant, ingenious ideas centuries before their time filled the pages of his legendary notebooks. And that’s where they remained. Until the innovators in another lifetime took them and shaped them into something actually workable.

History continues to repeat the lesson. It's common knowledge that Apple didn’t dream up its graphic interface, Xerox did. But Steve Jobs pirated the idea and made it a commercially viable concept. Apple stuck with it, continued to perfect it, and produced world-changing solution.

Da Vinci-like ideas rarely if ever work as originally conceived. Are they valuable? Of course. The point is that without the evolutionary innovation that makes them useful, the gap between the idea and the application is so wide that people don’t get it, can't see it. They resist it, so the invention remains a novel brainstorm, until you scale it back, scope it down, sculpting and honing it into something more manageable, acceptable, and useful.

Da Vinci-like ideas are few and far between. They have huge lead times. They have enormous carrying costs if you try to commercialize them right out of the gate. You absolutely need them to pepper the advance into new eras of industry. But for the mainstream business that seeks to achieve and sustain continuous success through steady progress, the real power of innovation lives in the more plentiful and more immediately actionable smaller ideas.

Still, continuous, incremental, evolutionary innovation gets little attention, much less respect.

Dissing the Ground Game

Many managers hold the view that evolutionary innovation is more trouble than it’s worth. They sell short the balanced portfolio power generated by a large and steady stream of smaller scale ideas in favor of the hunt for killer apps. That’s a mistake for the same reason you “don’t put all your eggs in one basket” by investing every dollar in a single stock, as economist James Tobin advised in his 1981 Nobel Award-winning thesis on portfolio selection and diversification. It leaves you at the mercy of the market with no hedge against the bet. It’s risky and foolhardy.

So why the disrespect? I can think of a few reasons.

First, there's the tunnel vision focus on revenue growth, which is far more exciting than profit improvement. But let's not forget some basic balance sheet gymnastics: you'd have to double your top line to equal the impact on the bottom line of small process improvements that save 10% of your overall costs. And that’s not even including the huge investment you’d have to make up front to design, develop and test a new product or service that will grow revenue 100%. Meanwhile, it’s the innovations aimed at the bottom line that yield the very profits that fund investment in new products and services.

Then there's business history. "Continuous improvement" happened to be one of a flurry of quality efforts in the mid 90s, which all flamed out for the same reason: the silver bullet syndrome. Aka, magic pills for business ills.

Different labels--total quality management, lean thinking, reengineering--were trounced out as the new program, and neither embraced as a serious discipline nor internalized. Consequently, there was no deep learning, and no new capability built. Managers wanted excellence, but didn’t want to put the hard work in. They wanted cheap, quick hits to show results. It was a reactionary stance focused on compliance and correction, on fixing defects, not a search for the ideal or optimal way to do something.

There was wholesale failure at building the necessary critical mass of more proactive and forward looking individual and team projects. Managers viewed continuous improvement as something separate from innovation, and when the low-hanging fruit was picked clean, and the painstaking work of instilling a true system-wide routine for finding and solving tougher problems began, they went searching for a new silver bullet.

Finally, there's the issue of business literature. All too often, innovation as a topic is about the great successes, not the many foibles and failures, and covered either as a groundbreaking event of rare genius, or a fortunate accident. Few researchers or authors want to report on the often boring and always painful process behind the breakthrough. The stories are all about the master stroke, the final outcome and the strategic implications.

Result: we’re still fairly clueless on the rigors and rewards of evolutionary innovation.

Innovation must be disciplinary and institutionalized, not programmatic or pocketed. It can’t be relegated to a department. It can’t be reserved for top level management. It can’t be just about eliminating defects. It can't just be about killer apps. It can't be about more bells and whistles.

It must be the creative core to the daily work of everyone in the organization, not a sideline event or activity. It must be about progress. It must be universally understood to be the path to a future everyone has a stake in. Everyone involved has to own it.

That kind of discipline requires a fundamental mindshift. That’s what makes it so very, very hard. There is no easy way. Most of us will count ourselves lucky if we get the chance to understand and practice innovation as a discipline, a way of life. Because it happens only over time and through experience. You have to do it over and over again to get it.

Innovation isn't something to take time out from your daily work to participate in, it is the work. Or should be, anyway.

Small and Steady

Evolutionary innovation--smaller ideas experimented with daily--builds the capability needed to achieve a cross-company culture of innovation. There’s no real downside to growing a strong portfolio of small ideas. Dealing in smaller currency lets you experiment more, get results quicker, and learn faster, without fretting over risk and exposure.

The more ideas you test, the more patterns and possibilities emerge. Which in turn gives you more opportunities to combine and multiply ideas into bigger ones. The multiplier effect of compounding ideas is enormous. And when the big idea hits, which it will when the time is right, it’ll be your evolutionary innovation chops that will sustain your competitive advantage and protect you from fast followers.

How? Easy. Your portfolio will remain secret sauce, because routine ground singles don’t catch the eye of scholars, competitors or the media like homeruns do. And by the time your competition catches on, you're on to something else.

Those who fail to evolutionary innovation are destined to be the eternal followers. Either that, or eternally outsource their innovation. That’s okay for some, even many. But refuse to adapt, and the near future may include the auction block. Adaptation is all about evolution through incremental progress.

And lest you think you’ll run out of things to improve or an irrational fear of diminishing returns kicks in, rest easy. Because the world keeps changing.

There’s no more logical way to consistently achieve breakthroughs than through a discipline of increments.

So think "Darwin," and remember: it's the relentless pursuit of something better that drives all successful innovation.

One of my favorite insights comes from Harvard's David Garvin: "Learning will always remain something of an art, but even the best artists can improve their technique."

I like it because it quite subtly highlights two different yet intertwined activities, learning and training.

Most companies engage in training. Few engage in real learning. Most companies focus heavily on leadership. Few focus on learnership. One path to leadership is innovation. And here's the thing: learning and innovation go hand in hand, but learning comes first.

The difference between learning and training is often subtle, but worth exploring. The challenge is, where to start?

The Ohno Circle

Learning precedes innovation. Innovation is about problem-solving. Problem-solving requires thinking. Thinking is the softest skill known, so how do you train it?

Enter the infamous Ohno Circle, named for legendary Toyota production engineer Taiichi Ohno. While I never met him (he passed away just under a decade before I began working with big T), I became a student of his methods, one of which is highly relevant to this discussion.

Taiichi Ohno was all about pursuing the right questions rather than securing the right answers. What drove his approach was not a need to know. It was a need to inquire. To understand. That’s a fundamental departure from how most people (and companies) define learning. He did not confuse training with learning.

But his masterfully wove them together. He knew that the ability to think critically is probably best handed down from mentor to disciple, because it's something so difficult to make explicit in a traditional classroom.

Many people have heard the legend of The Ohno Circle, but misunderstand the lesson to be about the power of observation. While observation is undoubtedly invaluable, the message runs much deeper.

The story is best told through the words of someone who knew the man. In a message to the World Class Manufacturing Forum in May, 2002, Toyota Senior Managing Director Teriyuki Minoura spoke of his experience with Mr. Ohno and the Ohno Circle.

"When I reflect on what Mr. Ohno taught us, one thing that stands out to me is that he taught us how to think. He taught us to think deeply. When I think about this, I think that perhaps the 'T' in TPS should stand not only for Toyota, but also for 'Thinking.' The 'Thinking Production System.'

Now I would like to relate a story of Mr. Ohno's teaching on thinking. Mr. Ohno often would draw a circle on the floor in the middle of a bottleneck area, and he would make us stand in that circle all day long and watch the process. He wanted us to watch and ask 'why?' over and over. You may have heard about the five 'why's' in TPS. Mr. Ohno felt that if we stood in that circle, watching and asking 'why?', better ideas would come to us. He realized that new thoughts and new technologies do not come out of the blue, they come from a true understanding of the process.

In my case, I thought it was strange when he asked me to go into the circle. But what could I say? I was a freshman and he was the big boss and a member of the board of directors! So I went into the circle and began to watch the process. During the first hour, I began to understand the process. After two hours, I began to see the problems. After the third and fourth hours, I was starting to ask 'why?' Finally, I found the root cause and started to think about countermeasures.

With the countermeasures in place, I reported back to Mr. Ohno what I had observed and the problems I saw and the countermeasures I put in place as well as the reasons for the countermeasures. Mr. Ohno would just say, 'Is that so?' and nothing more. He never gave us answers. Most of the time he wouldn't even tell us if what we did was good or bad.

Now I realize what Mr. Ohno was trying to do. He was trying to make us think deeply -- and think for ourselves."

The story reminds us of the old Chinese proverb: What I hear, I forget. What I see, I remember. What I do, I understand.

The Art of Learning

The New York Police Department employs a modern day version of The Ohno Circle, in a training capacity…less about the softer skill of thinking, and more focused on the harder skill of observing…but a worthy effort in the pursuit of learnership.

If you wander into New York’s Frick Collection on East Seventieth Street on a Monday, when the art museum is closed, you may be surprised to find a group of newly-minted detectives encircling a work of art. They're not there to appreciate the art, and they're not taking a course on catching art thieves.

In a new-school Ohno Circle sort of way, they’re there to improve their detecting technique by participating in a program developed by a former educational director for the Frick.

The officers are challenged to arrive at the who, what, where, why, and when of the painting before them--the art of Vermeer, or El Greco, or Hogarth--all quite visually ambiguous in form and substance, and extremely difficult to "analyze."

The officers learn to scan and analyze an entire canvas quickly but thoroughly. The process is one first of observation and description, moving from foreground to background, followed by analysis and conclusion.

NYPD believes that xxpanding the circle of observation this way can help in analyzing a crime scene. For example, in one case a fleeing suspect fell to the pavement while racing across rooftops to avoid capture. Frick training prompted the officer to stop, take in the entire scene, and widen his search perimeter beyond just the site of impact; he located an automobile on which detectives found palm prints that aided in reconstructing and mapping the intended escape route.

The connection between art, learning, training, thinking, and the circle of observation is as apparent to me as the sun in the sky. David Garvin had it right: learning is indeed an art, but every art requires technique, and every artist seeks to improve his technique.

What will you do today to improve yours?

Lady Gaga is one of the most well-known pop artists in the world, which is no surprise given her vocal talents and often bizarre wardrobe. She’s sold 23 million albums, won five Grammy awards, and been named by Forbes as one of the world’s most powerful celebrities.

But behind the public persona lies a shrewd and calculating business professional, a marketing machine which has turned music lovers into a worldwide legion of diehard fans eager to buy her music, her concert tickets, and any and all products related to her. Is this simply a classic case of loyalty marketing and customer cultivation? Perhaps. Apple aside, few businesses can claim a base of zealots anywhere near the same scope and scale.

In Monster Loyalty: How Lady Gaga Turns Followers into Fanatics, author Jackie Huba argues that Lady Gaga has not only created a brand, but is cultivating a fanatical group of consumers that will follow her for the next two decades of her career and beyond.

In four short years, Lady Gaga has built an army of passionate fans that numbers in the tens of millions around the globe. According to Huba, Lady Gaga didn’t become the success she is today based solely on her talent. She did so through the message she inspires and the community she has built around that message.

The Loyalty Playbook

Huba distills seven key strategies from the Gaga approach, which, while individually effective, become a solid business blueprint when taken together:

1. Focus on Your “One Percenters”: Gaga spends most of her effort on just one percent of her audience, the highly engaged super-fans who drive word of mouth.
2. Lead with Values: Create an emotional connection with customers by showcasing what you believe in.
3. Build Community: Connect your most loyal customers with each other to strengthen their bond with you.
4. Give Fans a Name: Gaga calls her fans her “Little Monsters.” A name gives customers a way to self-identify as part of the group. In fact, Gaga now has her own social network, little monsters.com.
5. Embrace Shared Symbols: Shared symbols help customers bond by creating a collective experience.
6. Make Them Feel Like Rock Stars: Become a fan of your fans and find ways to make them feel special.
7. Generate Something to Talk About: Make your business “word-of-mouth-worthy” by continually giving your fans reasons to talk about you.

5 Insights to Gaga

While these seven lessons seem sensible enough for a pop star, they beg a bit of insight and explanation in order for businesses to learn from them. Here, Huba answers a few questions:

Lady Gaga has such a specific brand and audience. What can the average businessperson really learn from her?

Gaga’s business of show business may be very different from the “average” business, but her focus on growing through devoted customer loyalty is a universal business objective. Most business people know that it’s far cheaper to keep a customer than to get new one. Gaga gets the math. It’s her overarching philosophy to focus on her core advocates, the super-fans, the “Little Monsters.” These advocates will ultimately be evangelists who bring in new customers on their own. This customer philosophy is one that businesses would do well to learn from Gaga.

How do more practical companies partake in her business philosophies without going over the top?

The best ideas sometimes come from the unlikeliest sources, and whether you love her or hate her, you can’t ignore what she has accomplished. I think it’s important to study what she does, how she does it and why, because there are ways to replicate her success in more traditional business settings. In every lesson from Gaga in the book, I highlight how traditional companies—from Whole Foods to MINI—are applying her methods to their customer bases, without having to wear any dresses made from meat.

You call her Little Monsters “One Percenters.” Can you explain this concept a bit more?

The idea of the One Percenters comes from our research during the early days of online community and social media. I looked at online communities and tracked what percentage of members in those communities created content—in other words, who was most engaged.

I found it amounted to just 1 percent of the total community members. This was surprising. The amount of super-engaged community members did not follow the usual 80/20 rule. We discovered that the volume of content creators was much smaller, at just 1 percent. That’s a very small part of the community, and yet it was creating most of the value for the entire community. Our thesis is that these One Percenters are a business’s most diehard customers—the ones who really love the company, buy new products as soon as they are released, give them as gifts and evangelize the company to everyone they know.

“Little Monsters” is a great fit for Lady Gaga, but can you give an example of how a business might “give fans a name”?

One of the best examples of a brand naming its fans is Maker’s Mark, the premium bourbon company out of Loretto, Kentucky. Bill Samuels, Jr., son of the founder, was looking for a way to better connect with the brand’s fanatical customers and created the Maker’s Mark Ambassador program.

Ambassadors are brand evangelists who volunteer to tell others about the product, and encourage bars that didn’t carry the brand at the time to do so. Today, there are hundreds of thousands of Makers Mark Ambassadors who receive custom business cards and fun holiday gifts from the brand, and gather for events at the distillery in Loretto each year.

What’s the most surprising thing you learned while studying Lady Gaga?

Lady Gaga’s business sense impresses me, but her passion for changing the world for the better through any means possible is what truly inspired me to study her. She is influencing an entire generation of young people to stand up for each other, to be more tolerant of differences and to be brave in the face of difficulty.

I have spent hours and hours reading fan comments about how she has changed lives for the better. I have cried watching YouTube videos of kids saying they thought about hurting themselves or ending their lives, but that her belief in them, a woman they don’t even know, kept them from doing it. They listen to her music, especially “Born This Way,” and they feel better about themselves. I believe that if there was ever a candidate to continue Oprah Winfrey’s legacy of inspiring people to live their best lives, it’s this five-foot-one, 26-year-old in a studded bikini.

Give Monster Loyalty a read, because there's a lot to learn from Lady Gaga. It is trust that engenders loyalty, and there isn't a business or individual on the planet that couldn't improve their trust quotient.