Adaptive Path Blog

Steve Gundrum | UX Week 2009 | Adaptive Path from Adaptive Path on Vimeo.

It’s becoming that season. You know, the season where food seems to take center stage. As the weather gets colder, comfort food, hot drinks and celebratory feasts appear on the horizon.

When I think of food, I think of things like: yummy, fragrant, spicy, hearty. Or, fruits & veggies, meat & potatoes, Mom’s amazing spaghetti.

Then I heard Steve Gundrum, CEO of Mattson speak at UX Week 2009 on “The Secret Ingredient” for Designing New Foods and Beverages. He told the insider tale about how the food industry thinks about food. It was fascinating, enlightening, and, I admit, a little creepy, as I captured in my sketchnotes of the talk.
Steve was passionate and engaged when he revealed the pyramid of maximizing profits. He did a great job of communicating how differently the food industry thinks, plans and designs food products. Do you think about attitude as a key ingredient in food? I didn’t either, but now I can’t get it out of my head.

To cap off the talk, Steve did what very few speakers know how to do: give the audience an experience with the simple tools of jellybeans, nose, mouth and time.

Are you designing experiences that have an insider view? Are you curious about what makes the food and beverage industry go? If so, take a peek through the keyhole into the world of food profitability with Steve Gundrum.

On Monday, it was announced that Mint.com was to be acquired by Intuit for $170 million.

On Tuesday, Aaron Forth, the VP of Product at Mint.com, spoke at UX Week. It was an excellent talk, sharing how Mint is structured to deliver rapid, user-focused innovation (in short: everybody cares about UX + nimble development processes allow for swift iterations). Among the things he mentioned was that Mint.com has 35 employees.

I did some quick math, and then tweeted:

Mint.com has 35 employees. Sold for $170MM. That’s $5MM per. That’s the value of UX. #uxweek

It’s proven to be the most re-tweeted thing I’ve ever written.

Mint.com’s success, much like any web pure-play, is largely dependent on the quality of its user experience. Especially in the realm of personal finances, where people are anxious about their performance, security-conscious, and easily confused by all the abstract terms, fees, and numbers.

Mint’s smart user experience orientation also provided immense leverage. A staff of just 35 has been able to build something robust, sizable, and, for many people, important. I’ve argued elsewhere that a secret of quality of user experience is that it enables businesses to get the most value out of existing, and potentially limited, resources. Mint’s case is a proof point.

Experience design is seen by most organizations as a cost center, yet those of us in the practice spend most of our days and nights developing solutions that deliver disproportionate value to the organizations that employ us and the customers that purchase our products and services. After all, that’s what keeps designers in business.

As much as I like a challenge, there are a few tell tale signs that there isn’t enough strategy work being done before a brief is issued or a project assigned. Over the years I have heard a few crop up repeatedly:

1. A redesign or new product is asked to do more than it realistically can. Like fix everything.

2. Everyone agrees something has to be done, but no one is sure what. Conversely: everyone thinks they have to do X, but no one is sure why.

3. Everyone agrees on what the design/product/service must accomplish, but everyone has a different idea of how.

4. You’re being asked the dreaded ROI of design question.

5. You have been asked to create a product/service platform or multi-channel experience out of thin air and it needs to launch in 6 months.

While these statements might be interpreted as sign that you’re in for a ride, they are also opportunities for us as designers to break out new tools and techniques for handling these situations. I’m curious how you handle the above mentioned situations (hint: leave comments). I’m going to be sharing a few of my own techniques in a virtual seminar on Wednesday. Register using the code BLOG for 10% off.

I recently had the pleasure of chatting via email with Sara Beckman, a member of the faculty at the Haas School of Business. Sara will be speaking on Communicating the Value of Design at our upcoming MX 2009 conference.

Embracing your inner “quant” changes the game for many design leaders. How do you move from the often subjective language of design to speaking a new dialect of business impact measured in numbers? In this conversation, Sara talks about approaches to assessing overall value, how having empirical data can unlock key strategic conversations, and tips for focusing efforts on the measurements that matter most.

You can read the full essay here.

But the essay is just one step in this very important conversation…hear more from Sara and other design leaders (and hobnob with the folks at the vanguard of leading experiences) at MX 2009 in San Francisco, March 1-3.

Register for MX 2009 here and use the code BLOG for 10% off.

Part 1 of this interview.
Part 2 of this interview.

Margret Schmidt is among our speakers at MX 2009, taking place 2-3 March in San Francisco. You can register for MX 2009 using the promotional code BLOG and get 10% off. Prices increase January 31st.

PM: We met at a conference last fall where you were speaking about the design and launch of the new TiVo.com website. I believe you mentioned that the site design had not significantly changed for 5 or so years before this most recent launch (and looking at the Internet Archive confirms this. What had been the organizational barriers to change? How were you able to overcome those barriers and launch a radically new design? What did it take to make the site more of an extension of the TiVo product experience?

MS: Historically, tivo.com was treated as an online version of our marketing materials. It was about selling DVRs, and marketing was responsible for that function. Because there wasn’t an interaction design team within marketing, overhauls of the site involved external agencies and lots of money, and didn’t happen that often. As the company evolved the web site did too, and we added product features like online scheduling, and we enhanced customer support tools.

Over the five years where the site didn’t change much, we actually undertook two different redesigns that never launched. They failed for many reasons, but mostly for lack of communication, teamwork, and a shared vision. Different teams had different agendas, and we sent conflicting messages to our agencies.

This last redesign was successful because everyone came together with a common vision. The site as “owned” by marketing, and the redesign project was “lead” by user experience. We had very open communication and shared responsibility. We modeled the project after the way we ship DVRs and features – collaboration and iteration. We did use an agency for vision and high-level design, but also a strong internal team that kept the principles of TiVo’s ease and simplicity in focus during the detailed design and implementation. It was a lot of hard work, but everyone involved knew the end result would be worth it.

Once the redesign was complete, we immediately jumped into the metrics to figure out what needed to be tweaked, and then launched further updates to the home page, “What is TiVo?”, and “Shop” based on what what was working, and what wasn’t. This ongoing work is done internally, with user experience as a service organization working for marketing, product management, or customer support (depending on the site section).

PM: Now to something a little less pleasant. In TiVo’s SEC filings (PDF), it’s recorded that in the last two years, TiVo’s total subscription numbers have gone from 4.4 million to 3.5 million. Obviously, TiVo is in a wickedly competitive market, and, frankly, it’s a testament to the quality of your experience that you’re still around, when what you are competing with is essentially “free”. Still, it must be quite worrisome. As VP of User Experience Research and Design, for what are you and your group held accountable? Do you have any metrics for which you must deliver? What is the charter of the User Experience group in improving the bottom line?

Also, in your seven years at TiVo, what have you had to learn about how businesses operate? How has that changed your view of the role of User Experience in business?

MS: User Experience is responsible for supporting the business needs of various groups. We strive to deliver the best experience for our products, and the best research to inform decision making. We don’t have our own metrics — we share the metrics of our businesses, like selling DVRs or shipping features on a schedule. Over my (nearly eight!) years at TiVo I have had increasing exposure to the business. UE participates actively in product strategy, and shares insights from customers in all aspects of the business, including pricing, packaging, marketing, and support. We bring the customer viewpoint into the conversation, so that the decision maker can weigh it along with the business needs and the technical implications. I think it is critical that businesses have this perspective.

PM: Obviously, I agree that businesses need to have that customer experience perspective, but, clearly, many don’t. As such, I like to use companies with strong UX practices as exemplars. Thinking about that, and the challenges that TiVo is facing, how do you see User Experience maintaining and even improving TiVo’s marketshare or bottom line? What new value opportunities has User Experience identified for TiVo?

MS: It is pretty much the standard stuff. Anything we can do to reduce support costs or increase sales helps the bottom line. When we design features, we think about how to minimize the reasons people might call for support; and we add online self-service tools to tivo.com. To help increase sales, we analyze the reasons people don’t complete a purchase (like they couldn’t tell if the particular model of TiVo DVR would work with the setup they have in their home) and we identify ways to address them. We’re adding a tool to the web site that asks a few questions about your home A/V and networking setup, and then identifies the DVR models that will work for you. We want to give customers confidence in their purchase decision.

PM: I want to wrap up our little conversation here with a look toward TiVo’s future. What new experiences can we look forward to? Thank you for your time!

MS: You’ll see us continue to focus on getting great content to your TV. And we’ll give you new ways to discover the best TV for you – ways that help you get the most out of the channels you already pay for. In these times, when people are cutting back on their entertainment spending, we want TiVo to be a great value for finding and enjoying the TV and movies that are most interesting to you.

Thank you Peter. I enjoyed the interview and look forward to MX 2009!

This will be my second recession in a design consultancy.

My first was in the early 2000’s, and while some argue that one was mild, the combination of tech crash, general recession, and a generation of business leaders who had spent most of their professional lives in a long run of wild exuberance made things pretty unpleasant for those of us in design and product development. Interestingly, this time around the business response is qualitatively different. Over the past few months, and even in the last couple of weeks as the emotional trauma of the financial meltdown has subsided, the response feels more measured, as if people had learned from the time before.

Unfortunately, the instinctive reaction to cut costs across the board is still around. Some companies are doing that and others are tempted, even though there is plenty of evidence telling us this is not actually the right thing to do. Bruce Nussbaum gave even us a prescient reminder of the mistakes we shouldn’t make right now – mistakes that essentially amount to walking away from providing great products and experiences, mistakes that are a voluntary dive into commoditization.

But what is the evidence supporting this advice, and is there a layer of subtlety that helps us understand exactly how and where to spend our precious cash reserves?

The Great Depression was actually the birthplace of many companies that became market leaders, precisely through this sort of investment. Henry Luce, who co-founded Time magazine in the boom times of the 20’s, launched Fortune magazine in 1930, the beginning of the depression. He recognized that people wanted to experience business news in a way very different than the dry, black and white, facts and figures journals of the day. He gave them insight to the people, thought and issues behind business, and delivered it as a sensual, visual, literary experience. And he commanded a price premium – one dollar an issue.

A few years later, in 1936, the middle of the depression, Luce began publishing Life. The beginning of photojournalism in the United States, Life drew together reporting and publishing tools that already existed, but by using them in a different manner, crafted an entirely new and compelling way to experience the news.

This sort of success is not merely anecdotal, and not limited to the Great Depression. In a study of the early 90’s recession, McKinsey & Co discovered that successful leaders (businesses that started and remained in the top quartile of their industries) did so in part by increasing their R&D spending dramatically – more than double their pre-recession spend. Successful challengers followed similarly contrarian strategies, and displaced former leaders who did not, taking their places in the top quartile. In fact, the challengers grew their businesses by 10.4%, while their former peers declined by 15.0%.

Of course, simply being contrarian and spending your way aimlessly through a recession is not the recipe for success. The McKinsey study gives us some guidance, and Kellogg Professor Andrew Razeghi puts greater detail to it with data from the PIMS study, which tells us that bearing the costs of innovation and meeting user need generally ends up benefiting the business, while the cost of fixed capital tends to hurt the business.

So how can we give people new and better things that they want, without significant investments in new equipment? Experience design, and a coherent Experience Strategy.

In fact, that was one of the main insights on our recent project with a big-box retailer; not that they needed to make new investments, but that they needed to choreograph and orchestrate their current components in such a fashion as to extract new and greater value from them. The magic, of course, is in the details of that orchestration.

If the value of getting experience design right is magnified in a recession, then the cost of getting it wrong can be catastrophic.

Starbucks founder Howard Schultz recognized exactly this problem when he wrote, “Stores no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store.” Excessive expansion and unfocused innovation had stripped Starbucks of the third-space experience that their customers valued, placed them in competition with McDonalds and Burger King, and set them up for costs of around $330 million as they try to regain what they lost.

So what are we seeing that makes me say that this recession feels different than the previous?

Companies are still looking to engage in experience design projects – good projects, properly funded and with realistic goals. Reflecting the nature of the times, they are being careful with their money. They’re spending the time to understand exactly what the project plan entails, they want to know that they are picking the right partner to work with, and they are lining up the internal commitments and connections that they will need to make the project successful.

The companies that are doing this are investing wisely, and I think they will be the ones that come out ahead when this recession ends, just as the other 21 since 1900 have ended.

A few days ago, while reading Bruce Temkin’s excellent Customer Experience Matters blog, I came across a post announcing a new Forrester report called “The Customer Experience Journey.” In the post, Bruce included the following diagram illustrating an organization’s maturity in delivering great experiences:

I was immediately struck by a flashback. Four years ago, my colleagues Janice Fraser and Scott Hirsch conducted research on the ties between business value and user experience, and one of their outcomes was what they called the ROI Process Model, which was depicted as such:

5 stages, shown in stair-step! And the parallels between the two are striking.

So, I realized that, 4 years later, we should simply give that research away. The report we published, “Leveraging Business Value: How ROI Changes User Experience” originally cost $395, but I’m happy to announce that you can now download it for free (412K PDF). You’ll find the ROI Process Model on page 28, with lengthy descriptions of each stage following it.

Other diagrams include the User Experience Value Chain:

And the first time we ever shared what we internally refer to as The Linking Elephants, which ties together user behavior and financial outcomes:

While the report is 4 years old, our experience is that the findings are relevant still today, and we use the models in this report often in our client work. It’s satisfying that Forrester’s report seems to validate Janice and Scott’s research, and we’re happy to share it with you free of charge.

In many organizations, the people responsible for the user experience strive to show the value of their work. We may instinctively know the value of our work, but it’s so much more powerful when we can explain it terms that matter to others in our organizations.

This is why I’m really happy to be presenting Showing the Value of UX as a virtual seminar on August 6th. The seminar is geared towards people who are entering a point in their careers where they need to understand and communicate about both sides of the equation: UX and business value.

The seminar starts with a deep exploration on the connections between UX and business value, then progresses to a series of principles and tools that you can use to connect User Experience to real business impact.

‘Showing the Value of UX’ is similar to material that I’ve presented and honed at prior conferences on design, business, and management, and so it’s exciting to be able to share these approaches and methods with you directly at your place of work. This will be the second running of the seminar, based on the positive feedback we received from the first session, including comments like this from Sam Felder of the University of Southern California:

“Your presentation had our team discussing your ideas through lunch and gems that we’re going to try to use with clients.”

I look forward to taking this material online, and talking with many of you during the extended Q&A sessions both during and after the presentation. Use the promotional code BLOG and get a 10% discount! Here’s where you can register »

Last week I attended Connecting 07, the ICSID/IDSA Congress. I’d never before engaged with IDSA, and I quite enjoyed it. What struck me was how the issues that industrial and product designers are facing are pretty much identical to what we’re seeing in the world of experience strategy and design.

My favorite talks/speakers:

Hans Rosling, Gapminder. Hans is a dynamic speaker who is able to make statistics and data visualization fun and provocative. If you haven’t seen his TED talk, you should.

Sabine Junginger, Lancaster University. Sabine spoke on “Design Change: A Paradox” about the role that design can play in change management. This may have been my favorite talk of the event, because it both supported and challenged conventional wisdom about the emerging role of design in business. As I wrote to my colleagues:

Sabine studied under Dick Buchanan at CMU, and has a Ph.D in…. DESIGN! But, she has her head screwed on tight. She pointed out that while design is often brought in to make change, it often serves to accommodate the status quo with band-aids.
Three things I liked:

she kind of dissed design thinking, saying you can’t separate thinking from making.

she pointed out how the current design+business craziness means that the different organizational silos (marketing, product dev, IT, etc.) each bring in design to make change, but end up using design only to bolster their silos

that successful change management with design *begins* with the product… i.e., it’s essential that you use the act of designing a product to produce change… you don’t change an organization in the abstract so that it can then produce better products
- visions and strategies (and organizations for that matter) must continue to evolve. (Okay, that was a fourth thing)

Sam Lucente, HP. Sam (written about in the latest Fast Company) is in charge of design across all of HP, and has an amazing story to tell about how design is evolving and succeeding at HP. He gave good slides, some of which I photographed. I think the most important lesson from Sam was that in order for the design practice to be seen as a valuable contributor at HP, work had to begin at the most basic level — consistency and simplicity throughout the entire product line — before design could be successfully used to differentiate and innovate.

James J. Pirkl, The Generation Connection. This guy advocated a “transgenerational” approach to design. He objects to how older generations are conventionally perceived, and made the case that many suppositions about the elderly are just plain wrong. He doesn’t advocate design for elderly though… He advocates design that works for all. He showed his Transgenerational House, an embodiment of his design principles, which, honestly, looks pretty cool.

Today’s New York Times feature on Prince belongs not in the Music section, but the Business section.

Given the themes that we address here at Adaptive Path and on the blog, what impressed me was how Prince was handling his “multi-channel experience.” He has a habit of giving away his recordings, which conventional wisdom would assume means he’s giving away his money. But in the same way that Apple controls iPod, iTunes, and the iTunes music store, Prince has achieved control over his recordings, his touring, his online presence, and the like. And in the same way Apple doesn’t make money on the iTunes Music Store but rakes it in with iPod, Prince seems to have an innate understanding of how his coordinated effort to get his music out in the world can produce far greater revenues than reliance on any one channel.

The power of Prince’s approach is summed up in this passage from the piece: “Prince’s priorities are obvious. The main one is getting his music to an audience, whether it’s purchased or not. ‘Prince’s only aim is to get music direct to those that want to hear it,’ his spokesman said when announcing that The Mail would include the CD.” Driven by that desire, he’s done everything he can to make that a reality, and has reaped the reward of not only significant cash, but total creative freedom.

How can your organization learn from Prince?