On May 14 management consulting giant McKinsey & Co. announced the acquisition of LUNAR, the venerable ID firm based in San Francisco. Known for their work with dozens of Silicon Valley stalwarts, LUNAR has a tradition of design and engineering going back 30+ years. This is another example of the evolution of the design industry, as businesses across the board continue to acknowledge the value design brings to the table.
There are plenty of recent examples of larger companies purchasing design studios, high-profile individual designers being hired by unexpected suitors, and of course and the ongoing commitment from many in the Fortune 500 to build large, in-house design organizations. These days it is not enough for a company like McKinsey to recommend that a client embrace and integrate design into their offerings, they must also ensure that these recommendations are enacted. And with LUNAR in their stable they can now do just that.
John Edson, LUNAR's president, took the time to provide some insight into what this deal means for them and for the business.
Stuart Constantine: In your press release you state: "While we are becoming part of the McKinsey family, we will also remain LUNAR. Better but not different. Our brand and studios will continue to thrive as they do today as the foundations to the most important sources of our creativity: our people and culture." Can you expand on this? Why is this important? Maybe explain a bit about the culture there at Lunar?
John Edson: In our view, creative designers and engineers are looking for three dimensions in a great job, in no particular order: people, place and purpose. Thanks to founders Jeff Smith and Gerard Furbershaw, LUNAR has always been filled with great people. In 1984, it was pretty unusual to find a design firm that placed so much importance on the individual and their contribution. When I started at LUNAR, we rotated the duties of washing the dishes, and the founders took their turns just like everyone else. It's a small thing, but it signals a larger thing. This teamwork culture at LUNAR is part and parcel with the creativity we bring to client work. We work together to create impact for clients, and there is no single star. Today the star is this person, tomorrow it's that person.
In terms of "place," we all know how inspiring it can be to work in a wonderful space. And that goes beyond great architecture. Do I have the tools that are so good, they are fun to use? Do I get to have ownership in my nest? People love being in our studio, and it's crucial to us that we keep and improve our aspiration. McKinsey offices are beautiful with amazing views, but they are for a different purpose and a different kind of work. We'll be staying in our places because they are built as creativity factories, and that's crucial to who and how we are.
Perhaps most important to our team is whether the work is meaningful—and that can be challenging, because everyone has their own "meaningful." But in general, these are the kinds of questions that we hear over and over: Are the projects important, and are they improving lives or the environment? Will we be proud of the work we're doing? Are we working in a context where our creativity is valued? Or perhaps more honestly at some level, does the work have the potential to make the magazine cover and be the subject of conversation in the design community?
Because we need and want to attract the most creative and talented people, we will be working hard to work on the most meaningful things with a focus on developing our team and having fun in the process. I can tell you that in our first experimental projects working together, there is plenty to look forward to in this regard. Sorry that I can't be more specific than that. Either you believe in the possibilities or you have to see it to believe it.
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In terms of the day-to-day activity within the LUNAR studios, what sort of impact will this acquisition have? Will the types of projects you work on change? Will the way your teams work change?
Nothing changes in the way that we operate day to day. LUNAR's leadership remains intact. LUNAR's studios remain intact. In many ways, adding McKinsey to LUNAR is like adding a big bucket of really interesting client projects. We have floated a number of trial balloons over the last year—real McKinsey client work—and we've been inspired by the potential. For instance, imagine being part of a project to help transform an international company by reinventing and redesigning their entire line of products—and building a design capability for them at the same time. This work cuts across all of our capabilities, from design to engineering to strategy. And it's delicious work for a brand everyone knows.
It's also worth mentioning a detail that is quite important to our partners in Munich. Not many people know this, but the LUNAR Europe office is a brand licensee of our company. We set it up this way when they started 8 years ago because Roman Gebhard (who worked at LUNAR San Francisco for many years) and Matthis Hamann were looking to start their own design practice after leaving Siemens around that time. We saw the opportunity for a great synergy, for a test model that could extend the LUNAR brand globally. It's worked great, and we have collaborated on many projects despite technically being separate businesses. We share the same soul. At this time they are not being acquired by McKinsey, but our structure remains the same—and we expect to continue our wonderful partnership.
You talked a bit about how this partnership will allow the LUNAR team access to clients earlier in the course of strategy and planning. Can you provide some detail on what that means? How is it different for you and your team?
Over the last decade, we've been doing our work closer and closer to the front end, where the strategy gets baked. That's partly by intent, partly what's happening in the world. Design is becoming the heart and soul of commerce—and great, disruptive companies are setting strategy with their hearts as well their heads. We all know that it's not enough to apply design at the end, as window dressing. Great companies think with their whole brains, and that means design has a home in the C-suite. With McKinsey, this effect is only amplified. They are partners to corporate leaders who can make big differences with design.
The other thing that's important here is that it's not merely strategy. It's also execution. McKinsey has been expanding into many implementation and operational areas for their clients because strategy without the right execution can fall flat. Being full-spectrum is the future.
You personally have a lot of experience in the design industry. You've been there, done that, and seen the shifts in business and design over the past 10 -15 years. What do you think about this acquisition in the context of the larger design industry?
Well, in a word, it's spectacular. It's a pretty obvious affirmation that we've got something special, and I'm not just talking about LUNAR. Where designers used to complain that they didn't have a seat at the table—presumably meaning the one where decisions get made and projects get funded—it's now clear that we've earned that seat, and now we'd all better have something to say. The thing that LUNAR says is that design creates impact.