Competing on customer experience
uxdesign.cc – User Experience Design — Medium | Eva Nudea Horner
How the value proposition of design is changing
Today’s customers are more influential than ever, able to shift market demands and define a company’s success with the power of digital word-of-mouth. We’ve reached an era where design is a key competitive advantage in the consumer market. This is my attempt to give you some insight into preconditions that go into what I see as the next challenge for corporations around the globe to become (more) customer-centric.
Companies are faced with decreased brand loyalty and an increase in consumer power. This has compelled companies to rethink the way they do business, focussing on the user experience, exploring new ways to move towards customer-centricity.
As the value proposition of design is gaining more traction, questions are arising about how design fits into companies, and why, when and how it should play a role. ‘Design culture’ is in part the idea that design can become part of a company’s DNA and its modus operandi.
Staying relevant in today’s market
We all know that Agile methodologies have taken over the modern corporate world, where speed-to-market got full focus and was seen as the formula for success. While we are still struggling today with how to effectively fuse design into an Agile development process, I believe today’s (and tomorrow’s) innovations are much more about user- and business model innovations. Don’t mistake this being a thing for startups or Silicon Valley companies, it’s decidedly not.
Gartner Research reports that 89% of companies expect to compete mostly on the basis of customer experience this year. Being able to survive in The Age of the Customer, takes creativity because it entails generating, embracing, and executing new ideas. It’s what you need to do as a business to survive. Organizations without it just can’t compete. Don’t just take my word for it, according to the Design Management Institute’s Design Value Index, design-driven companies have maintained a significant stock market advantage, outperforming the S&P 500 by an extraordinary 219 percent over the past ten years. You don’t need to look far to see the value of design.
👍 Product performance ≠ 👍 user experience
Think about a product you recently bought. Now think about the experience you had buying and using that product. It’s not only increasingly difficult to separate these two elements, but we see that customers prioritize the experience of buying and using a product over the performance of the product itself. Because customer experience is an increasing key competitive advantage, companies will have to re-think how they allocate their budgets and do business. When the perceived value for the consumer shifts, businesses will have no choice but anticipate on that change in order to stay relevant in today’s market.
Corporate culture can be destructive
Many companies want to improve the user experience. Pretty much every company proclaims to focus on the customer. But making design part of core capabilities that drive growth, investment and a company’s competitive advantage means making decisions in new ways. Hiring a couple of designers or a chief design officer (although, that would be a step in the right direction!) is simply not enough.
Corporate culture is the particular condition in which people think, act, co-exist and work in an organization; it functions as an invisible force field that colors people’s perceptions. It shapes, distorts and reinforces their thinking about themselves and others, ultimately influencing — if not steering — their behaviour.
Embedding design culture means redefining the company’s strategy, corporate culture (people!), processes, practices, systems and structures. This is how companies can truly reap meaningful benefits from design. Many organizations have corporate cultures that are destructive to design thinking because of a fear to make mistakes and a fear of failing. This stands in the way of trying something different, initiating experiments and deconstruct routines with the purpose of breaking out of habit-forming patterns.
Here’s a little anecdote about how corporate culture can be utterly intolerant to innovation and choke out new opportunities. You probably are familiar with Nespresso (George Clooney, anyone!?). Well, on several occasions, Nestlé executives tried to kill the now-successful coffee system. Nestlé was in the food business, not in the kitchen gadget business, and execs were skeptical because it didn’t fit into their business model, nor did it fit into their line of business at that time. It didn’t get much traction for years, with Nestlé almost pulling the plug several times. Nespresso did managed to survive and thrived when it was established as a separate company, in a different building, and an outsider was brought in for new perspectives and ideas.
Often, a corporate culture becomes rigid and unquestioned, the absolute view of reality, how things are done here. In those cases, the organization loses flexibility, waste increases and execution slows.
Design thinking is a human-centered design method — focused on the customer or whoever the end users may be. Design thinking requires a high degree of empathy for the end user, and thus in-depth knowledge of your audience. It’s solution focussed (“how might we?”) and action oriented, requires a habit of experimentation which involves creating, prototyping and failing (and thus learning!).
Therefore, the practice of design thinking is likely to be incompatible to the corporate culture of most large organizations, where rigid hierarchical structures, data-driven decisions, well-established rates of return on investment and a high cost of failure are often the go-to ways of operating. Budgets and key performance indicators often are not aligned with performance on customer metrics. Research may be superficial or of another nature, e.g. generic market research, and business decisions made at the executive level rarely consider the impact on customers.
The difference with design-driven companies is that they seek to go far beyond understanding what customers want, but rather move into acquiring an in-depth look into people’s behavior, emotions and struggles. They value solving the customer’s problem, enabling the end user to be a better version of themselves, instead of simply pushing an existing solution. And by this, they provide the right conditions to create desirable products and services that customers love.
User-centered companies recognize that while data is important in order to understand customer behavior, it’s short on empathy.
I love the following quote by Jeff Bezos, which illustrates what can be gained when being familiar with the little anecdotes that make up the world of your end-user. Something that may seem so small, has so much worth.
Jeff Bezos, CEO & Founder of Amazon.com
Good inventors and designers deeply understand their customer. They study and understand many anecdotes rather than only the averages you’ll find on surveys. A remarkable customer experience starts with heart, intuition, curiosity, play, guts, taste. You won’t find any of it in a survey.
Design perspective fueled by research
Design-driven companies turn to UX researchers to conduct contextual one-on-one interviews, shopper-shadowing exercises, and “follow me homes” to observe, listen, and learn how people use and experience products and particularly how these fit into their (day-to-day) lives. They plot out customer journeys to understand exactly what motivates people, what their struggles are, and where the opportunities lie to create delightful experiences. This is the difference between paying lip-service to customer-centricity and actually incorporating it into a company’s belief system.
One of the value propositions of design is that it can envision products and services that customers truly need and love, by deeply researching user needs. Teams get enough space to manoeuvre to scope and discover a problem through the process, rather than having a tight scope and fixed requirements from the very start. As a result the design perspective becomes an inherent requirement of the work, even to the point of impacting the type of work and projects that are taken on.
Becoming a design-driven company doesn’t happen overnight, nor is it something that is absolute. It’s a process of transformation. It requires seamlessly streamlining people, processes, technology and funding.
Want to know how to transform into a design-driven organization? Stay tuned for my next story in which I’ll share with you what exactly goes into becoming design-driven.
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