Over the past several years, we have seen an increased request for full life-cycle engagements with our clients, meaning business strategy, design, and development. While this offering can seem linear from a planning perspective, our experience has revealed that achieving a business, service, or product that is sustainable and valuable to customer is a much more fluid process.
We recently sat down with our Chief Strategy Officer and Founder, Patrick Newbery, to discuss the complexities and impact of strategy, design and technology for businesses.
What does design mean to you? What does technology mean to you?
I always like to refer to the dictionary.
- a plan or drawing produced to show the look and function or workings of a building, garment, or other object before it is built or made.
- purpose, planning, or intention that exists or is thought to exist behind an action, fact, or material object.
- decide upon the look and functioning of (a building, garment, or other object), typically by making a detailed drawing of it.
- the application of scientific knowledge for practical purposes, especially in industry.
- machinery and equipment developed from the application of scientific knowledge.
- the branch of knowledge dealing with engineering or applied sciences.
What is important is that each of these terms applies both to the output or artifact as well as the process that is used to arrive at the output.
These days, I often tell people that because of the role that technology plays in how customers and businesses interact, we can no longer think of design and technology as two separate concepts or disciplines of practice.
A designer who doesn’t understand technology or an engineer that doesn’t understand design will not satisfy a modern businesses needs or create a compelling customer experience. John Maeda introduced the term Design:Tech to refer to a new breed of talent that essentially cut their teeth working at the intersection of the two disciplines. I think that this is a really important point. What it allows for is both a strategic-level of practice and a more tactical/production-level for design:tech.
It’s much less productive to try to separate design and tech and say design can be more strategic and tech is going to tend to be more tactical.
What does strategic design mean to you? How is it an asset for businesses?
Strategic design is an approach to design that recognizes that design methodologies can be useful at various levels of an organization. Strategic design itself is not an asset, but it is required to build assets for business. The ability to enhance value creation through design is based on what you might call an organization’s design maturity. At the low-end of the spectrum, design is simply a way of using appearance to imply quality — it’s packaging of a message, access to a product’s function, or the experience of using a service. At the high-end, design is is a way of creating meaning — organizing value creation and delivery — based on business objectives such as innovation, or customer engagement, or growth of market share.
Let me give 3 examples:
If you are a business that has a single product, say a mobile app, the role of design is to ensure that the app provides utility for customers and is differentiated from competitors. Your success will likely be dependent on how many people download and continue to use your app.
If you are a service provider, you may have apps that need to work across a range of devices and customer types, and the level of support you may need to make available to customers may be broader and more persistent. The role of design is to ensure utility and differentiation, and also to keep coherence and consistency across the experience. Your success will be dependent on ensuring a certain level of service quality, regardless of how the customer chooses to engage.
If you are engaging and transacting with customers across a range of channels, you now not only have the potential of having to support a range of devices, but your core business may need to be transacted in different ways, depending on the attributes of channels used, and customer expectations associated with these channels. The role of design is to ensure utility, differentiation, coherency and consistency across experiences, and also to provide an efficient foundation for extending existing products and services, and integrating new/emergent innovations.
In the first example, the design of the product user experience, including the user interface, may be the single most important area that design can address. However, the work design can address at the product-level does not magically rise up and expand to cover all of the needs for design of example 3. Moreover, when different business units and functions are each engaging design services for their specific needs, the ability for all of these approaches to integrate well and fully serve all the needs of example 3 is low. Who suffers as a result? First, it’s the customer. Eventually, it will be the business.
When talking about design and technology together, how do you close the loop for clients who don’t understand the connections?
In a broad sense, the adoption of digital technology has shifted many industries from a product-based business model to a service-based business model. The long-term value of hardware is often that it’s just another channel for delivering services. This changes the economics for both growing service-based businesses and hardware product strategy. From a business standpoint, the concept of a platform that can enable multiple customer types (from partners to end-users) creates a competitive advantage, largely driven by the ability to monetize data generated, analyzed, and accessed through the platform.
We often simplify this to the concept that we are entering an era of the software-driven value chain and software-mediated customer engagement. From this perspective, you can’t really talk about design and technology as separate. Design and technology are two sides of the same coin. Capabilities to concepts to products/services to customer experience touchpoints.
When/why/how is it important to have design involved in a technology focused product or service?
All the time; otherwise you risk missing opportunities, making incorrect assumptions, or leaving out key components that are essential for adoption. Really the question is what kind of role(s) should design play during the ideation-development-deployment life-cycle of a given product or service.
For an organization that is maybe not historically digital, how can design and technology as a combined offering help the transition into being a digital company?
Understanding and integrating “digital” into business requires that a company be capable of understanding how technology is changing the fundamental business model and what this means both in terms of threats and opportunities. It also requires that companies need to re-examine their product strategies and product development approaches. Lastly, it requires shifting strategies, processes, and assumptions around IT systems and management (especially where IT is playing a role supporting products and customer experiences).
A design:tech approach helps a business better develop capability along each of these requirement-paths and to keep progress across areas integrated. For instance, using a design:tech approach to visioning helps businesses understand how changes in technology and customer expectations can play out in different approaches to the core business model. While this doesn’t replace a traditional quantitative and benchmark-based approach to exploring business models, design:tech can help identify adjacent opportunities or new forms of value-creation or customer engagement.
When design:tech is involved with the definition and development of products and services, a business is able to shorten time to market and prevent over-investment in products and services features that aren’t validated against user need. Design:tech can also create greater efficiencies in actual product development (through design systems, pattern libraries, and tech tool chains) and support greater coherency across product and service eco-systems.
Products and services developed by a design:tech approach on modern architectures, through agile/scrum methodologies, and supported by DevOps processes and toolchains provides a number of benefits. The first is greater transparency and understanding of the “current state” of product and service development. It also provides better connection between work focus and business/customer needs. These new practices also allow for capabilities to be built that are reusable and can make it easier for companies to pivot their product focus or quickly address additional needs or new business requirements.
Can you give an example of when this transformation was successful?
It’s not really a matter of when this is successful. This is simply the new landscape that businesses find themselves operating in and in which the next-generation of competition is being birthed. Businesses will have different rates of change and ability to integrate efforts across vision, product and service definition, and modern software development approaches. Often the required rates of change or internal desire to transform are driven by broader changes to markets and industries, but overall, we see everyone moving in this direction.
What are some of the roadblocks within an organization that you have encountered that prevent a successful digital transformation?
The biggest roadblocks to any change are almost always people’s mindsets. This may be that business leaders are so sure of their expertise and knowledge that they completely discount the need for, or speed of, impending change. It’s easy to construct a view that reinforces the status quo, partly because the changes may not be as linear as one’s worldview might initially suggest. When Yahoo! dominated search, and Google was a young upstart, the future of internet “portals” was content, community, and commerce.
Google proved that search and the data associated with it was actually the most important component and would drive greater value for business and create greater engagement with users.
Blockbuster’s service model of renting media fell largely because of Netflix, but Netflix’s real competitor turns out to be businesses like HBO, who are monetizing content creation. Tomorrow’s real sweet spot for today’s business may not be a straight line evolution. Amazon is getting into brick and mortar, while for the past 15 years, brick and mortar retailers have been trying to go more and more e-commerce.
In some cases, people may feel that they are embracing the right level of change, but are unaware that the processes they use prevent them from addressing change correctly or from fully realizing an opportunity.
The wrong process can undermine the objectives and requirements of today’s product development best-practices (inclusion of un-validated requirements or features, inability to identify and test for key risks or poor assumptions, lack of including insights from seeing real people and real behavior, etc.). In many cases, people’s roles and areas of responsibility are defined by or tied to processes, so questioning processes leads to politics and turf-wars in which solutions may make internal folks happy but compromise the outcomes for customers and partners.
The other challenges that come with fixed mindsets are the inability to abandon previous investment (the sunk cost problem) and the lack of motivation that comes about when changes require undergoing a period of decreased performance.
It’s very difficult to convince a public company to stop doing something that is almost certainly profitable today in order to invest in something that will likely be profitable in the future, even if everyone agrees that the current approach is not sustainable. Few want to deal with upsetting shareholders and not delivering on analysts expectations because they may feel it will cast aspersions on their capabilities (or know it will jeopardize their bonus).
How do you help companies shift their thinking to become more customer focused?Particularly if they think their issues are just a piece of software, or just a re-design of a logo? How can technology and design work together to solve these problems?
There is a pretty pervasive shift toward customer-centricity underway already. Businesses now are very interested in the customer experience. Part of this is necessity; in a competitive world of services, your business is defined by customer engagement. If your churn rate (customer defection) exceeds your customer acquisition rate, you are in deep trouble, especially if you have a narrow market. In addition, if you are not able to increase the value of a customer over the lifetime of the relationship, business growth can only come through new customers.
The first reaction to becoming aware of the importance of customer experience is often that businesses begin to look at increasing the focus of design on the low-end of the design maturity scale: “We need to update our application look and feel so that it is more current and feels higher-quality”. This will pretty much ensure you stay on the slow-speed learning curve as you learn that this is not going to produce the kind of results that are needed. You don’t increase the mileage of a car by changing the body paint, upholstery, and knobs.
What’s more important is for a business to be very honest with themselves about where they really stand: Is it our business that needs to change or is it the industry? Is the change we need something we have the luxury of initiating ourselves or are we being forced to change? How far do we need to move and what kind of investment will it take? How do we manage change?
Too often, business look at this “transformation” as being about becoming “digital”, as if digital is simply a function that can be integrated. If you approach it from a software-driven value chain and software-mediated customer engagement perspective, then I think you begin to ask questions like how can an investment in platform-based capabilities allow us to become a data-driven business?