peter merholz at baychi july 8, 2008: creating great products and services in an uncertain world
DESCRIPTION
The way most organizations think and work on products and services isn't suited to the unpredictable world we live in. Instead, companies need new ways of thinking and working to adapt into innovative, agile, and commercially successful organizations who creates great products and services. Peter Merholz, one of the authors of Adaptive Path's new book, Subject to Change, will share a handful of breakthrough ideas for succeeding in a future that you can't predict.TRANSCRIPT
SUBJECT TO CHANGEcreating great products and services for an uncertain world
ContainerizationManufacturing costs plummet
Global communicationThe world gets smaller
DigitalizationProducts get more complex
Music is in metamorphosis
Travel is turbulent
Media is a messCraigslist took the classifiedsEveryone took a piece of the adsBlogs are taking the readers
iTunes is the #1 retailerLabels are losing their grip
The three top quality carriers are all low-fair airlines
, but it’s never been more difficultpredicting the future has never been easy
Predicting the future won’t work.
Instead, seek approaches that will continue to work no matter which prediction comes true.
Meeting about it won’t work.
A Brief History Lesson
A new photographic apparatus
A new photographic apparatus
A NEW PHOTOGRAPHIC APPARATUS.
This apparatus consists of a box containing a camera, A, and a frame, C, containing the desired number of plates, eachheld in a small frame of black Bristol board. The camera
contains a mirror, M, which pivots upon an axis and ismaneuvered by the extreme bottom, B. This mirror stops at
an angle of 45°, and sends the image coming from the objective to the horizontal plate, D, at the upper part of the camera. The image thus reflected is righted upon this plate.
As the objective is of short focus, every object situated beyond a distance of three yards from the apparatus is infocus. In exceptional cases, where the operator might be
nearer the object to be photographed, the focusing would bedone by means of the rack of the objective. The latter canalso slide up and down, so that the apparatus need not be
inclined when buildings or high trees are being photographed. The door, E, performs the role of a shade. When the
apparatus has been fixed upon its tripod and properlydirected, all the operator has to do is to close the door, P, andraise the mirror, M, by turning the button, B, and then expose
the plate. The sensitized plates are introduced into theapparatus through the door, I, and are always brought automatically to the focus of the objective through the
pressure of the springs, R. The shutter of the frame, B, opensthrough a hook, H, with in the pocket, N. After exposure, each
plate is lifted by means of the extractor, K, into the pocket,whence it is taken by hand and introduced through a slit, S,behind the springs, R, and the other plates that the frame
contains. All these operations are performed in the interior of the pocket, N, through the impermeable, triple fabric of which
no light can enter.
An automatic marker shows the number of plates exposed.When the operations are finished, the objective is put back inthe interior of the camera, the doors, P and E, are closed, and
the pocket is rolled up. The apparatus is thus hermeticallyclosed, and, containing all the accessories, forms one of the
most practical of systems for the itinerant photographer.
“You press the button,
we do the rest.”
1 2 3
Why is this story important?
Because this focus on the customer experience made Kodak successful for years.
And when they’ve stumbled it’s been because they lost this focus.
data
logic
user interface
MAGIC
user interface
data
logic
user interface
g
ntnte
data
logic
user interface
The experience is the product.
The experience is the product.
Focus on the lives of customers.
Engage in design as an activity.
Think systems, not artifacts.
Deliver the Long Wow.
The experience is the product.
Focus on the lives of customers.» Understand people as people.
Engage in design as an activity.
Think systems, not artifacts.
Deliver the Long Wow.
No!
Compare this to a focus group set up
Companies tend to oversimplify their view of people
old ways of thinking
4
At worst:“a gullet whose only purpose in life is to gulp
products and crap cash.”
Ruthlessly stolen from The Cluetrain Manifesto
#1
$
Docile and gullible
Stories and messaging
Preferences!
#2
Sheep
Highly rational
Maximizes utility
Quantity!
Homo Economicus
#3
Task oriented
Goal driven
Efficiency!
#4
Type A Personality
Not all wrong, not really right.We are evolving our approaches.
What’s been missing?
The messy complexity of human life
People regularly mix and match products with little regard for
“suggested use.”
photo by Windell Oskay
They challenge social and cultural boundaries
in unexpected ways.
Understand people as people.(Understand them as we understand ourselves.)
What’s been missing?
BehaviorMotivation
ContextEmotion
Motivation
Call Bank About Product
Concepts
Define Personal Needs
Learn About Process
Learn the home buying
process
Research Bank Locations
Research Banks
Compare Banks
Research banks online Research
Technology
Seek Compatibility
with MSN
Look for safety deposit box
Look for branches
Talk to BofA about
mortgage
Become Aware of Products
Get Overview of Products
Understand Product Details
Research checking
needs
Look for mutual funds/
IRAs
Research specific funds
Look at mortgage
rates
Compare Products
Review refinance options
Realize unreadiness
Realize unreadiness
Look at specific items
Evaluate Long Term Banking
Options
Evaluate Future Products
Research IRAsEvaluate long term banking
options
Research checking
Negotiate
Negotiate over phone
Conduct Followup Research
Follow up over phone
Negotiate in branch
Research banks in person
Read promotional
Get business loan info in
branch
Research fees
Seek promotions
Learn about bill pay features
Create mental list of needs
Research specific loan
options
Read bank brochures
Run scenarios with tools
Research business insurance
Consider types of business
services
Line info
Product info
Feature info
LOB info
Product list
Feature list
RatesFAQ
Eligibility
Terms
Comparison
Product selector
Product specs
Feature specs
Fees
Checklist
Use process
Product demo
Security
Help
Financial planning resource
Mark funds for further review
Research Products
Across Banks
Compare rates
Research credit line
Read brochures
Attend home buyng seminar
Quarterly report
Community info
ContactFinancial planning resource
Locations Offers
Locations
Opt-in Form
Compare Products Mental Space
Contact
Locations
Offers
Product list
Contact
Locations
Product demo
Contact
Locations
Calculator
Calculator
Case study list
Case study detail
Live chat
Live chat
Live chat
Compare Products Mental Space
Welcome kit
Call Bank About Product
Concepts
Define Personal Needs
Learn About Process
Learn the home buying
process
Research Bank Locations
Research Banks
Compare Banks
Research banks online Research
Technology
Seek Compatibility
with MSN
Look for safety deposit box
Look for branches
Talk to BofA about
mortgage
Become Aware of Products
Get Overview of Products
Understand Product Details
Research checking
needs
Look for mutual funds/
IRAs
Research specific funds
Look at mortgage
rates
Compare Products
Review refinance options
Realize unreadiness
Realize unreadiness
Look at specific items
Evaluate Long Term Banking
Options
Evaluate Future Products
Research IRAsEvaluate long term banking
options
Research checking
Negotiate
Negotiate over phone
Conduct Followup Research
Follow up over phone
Negotiate in branch
Research banks in person
Read promotional
Get business loan info in
branch
Research fees
Seek promotions
Learn about bill pay features
Create mental list of needs
Research specific loan
options
Read bank brochures
Run scenarios with tools
Research business insurance
Consider types of business
services
Line info
Product info
Feature info
LOB info
Product list
Feature list
RatesFAQ
Eligibility
Terms
Comparison
Product selector
Product specs
Feature specs
Fees
Checklist
Use process
Product demo
Security
Help
Financial planning resource
Mark funds for further review
Research Products
Across Banks
Compare rates
Research credit line
Read brochures
Attend home buyng seminar
Quarterly report
Community info
ContactFinancial planning resource
Locations Offers
Locations
Opt-in Form
Compare Products Mental Space
Contact
Locations
Offers
Product list
Contact
Locations
Product demo
Contact
Locations
Calculator
Calculator
Case study list
Case study detail
Live chat
Live chat
Live chat
Compare Products Mental Space
Welcome kit
Motivationconsolidation
bank convenience
knowledge is power
online convenience
identification with personas
sensitivity to cost
privacy and security
multi-session research
research online first
multi-channel process
no clear end state
going through the motions
need to be a responsible consumer
fear of being manipulated
evaluating future
products
emotional requirements
serious transactions not online
site experience indicates ease of working with bank
go online first to conveniently get knowledge
get knowledge before talking to a personcompelled to seek bargains
1: convenience
2: online
3: knowledge
4: emotion
eess
ss
ch Banh Btions
r safetyit box
k forches
tions
knowledge is power
identification with personas
sensitivity to cost
privacy and security
multi-session research
research online first
multi-channel process
no clear end state
going through the motions
need to be a responsible consumer
fear of being manipulated
emotional requirements
serious transactions not online
go online first to conveniently get knowledge
get knowledge before talking to a personcompelled to seek bargains
1: convenience
2: online
3: knowledge
4: emotion
"Medical device manufacturers are stuck in a bygone era; they continue to design these products in an engineering-driven, physician-centered bubble. They have not yet grasped the concept that medical devices are also life devices, and therefore need to feel good and look good for the patients using them 24/7, in addition to keeping us alive."
Amy Tenderich, Diabetes Mine blog
She has a point...
We talked to diabetics
Easy to learn and teach/No numbersMake better use of dataLess stuffKeep users in controlHelp keep users motivated
Wear it during sex
BehaviorMotivation
ContextEmotion
TasksGoals
Preferences
More insightBy changing the size and shape of our research filters, more and better information gets through the sifting process.
Do you understand your customers as people?
The experience is the product.
Focus on the lives of customers.» Understand people as people.
Engage in design as an activity.» Design becomes an organizational competency.
Think systems, not artifacts.
Deliver the Long Wow.
Five ways of thinking of design
1. Design as aesthetics
2. Design as a distinct role
3. Design as a thing
4. Design as a rock star
Five ways of thinking of design
1. Design as aesthetics
2. Design as a distinct role
3. Design as a thing
4. Design as a rock star
5. ???
Design as an activity
Design can be an activity that an organization embraces, that everyone can be involved in.
Designers become facilitators
Design can be an activity that an organization embraces, that everyone can be involved in.
We engage cross-functional teams, get design ideas out of them, and then work to refine and hone them
Complexity warrants design approaches
iteration
iteration prototyping and making
Complexity warrants design approaches
Finance Co.
AdvisorPhoneStatement WebPrint
iteration prototyping and making
deep/wide collaboration
Complexity warrants design approaches
How are you embracing design approaches?
The experience is the product.
Focus on the lives of customers.» Understand people as people.
Engage in design as an activity.» Design becomes an organizational competency.
Think systems, not artifacts.» Embrace complexity, and expose appropriately
Deliver the Long Wow.
You press the button…
You press the button…
...and we do the rest.
Experiences cross boundaries
Finance Co.
AdvisorPhoneStatement WebPrint
Finance Co.
Experiences cross boundaries
AdvisorPhoneStatement WebPrint
A safer drug delivery system
The ClearRx system
ClearRX marketingpharmacists pill bottle
POS system
supply chainCRM
training
IT systems and operations
Customer-facing experience
The ClearRx system
ClearRX marketingpharmacists pill bottle
POS system
supply chainCRM
training
IT systems and operations
Customer-facing experience
ClearRX marketingpharmacists
POS system
CRM
Customer-facing experience
Are you designing systems that support experiences?
The experience is the product.
Focus on experience.» Use experience as strategy.
Focus on the lives of customers.» Understand people as people.
Think systems, not artifacts.» Embrace complexity, and expose appropriately.
Deliver The Long Wow.» Unfold delightful experiences over time.
How do you create customer
loyalty?
Over 75% of consumers have at least one loyalty card— Jupiter Research
“Want loyalty? Get a dog.”— Randy Susan Wagner, CMO of Orbitz
"Christmas isn't something you buy from a store… Christmas, perhaps, means a little bit more.”
Meaning more means repeatedly creating notably great experiences
True loyalty — and the word-of-mouth that comes with it — evolves natural from the great experience you have with a company over time.
Meaning more means repeatedly creating notably great experiences
Notably great experiences are punctuated by a moment of “wow,” when the product or service delights, anticipates the needs of, or pleasantly surprises a person.
Peak-end rule
from Daniel Kahneman
average
average
Manage your platform for
delivery
Draw from a wide area of unmet needs
Evolve your repeatable
process
The Long Wow
wow
Plan and stage the wow
experience
4. Plan and stage the wow experience
Before Now Next Later
organize a pipeline of wow moments that can be introduced through your palette of touchpoints over time
pack in features up
front
unfold new experiences
over time
wowSynched tracking
{ }
{ }…it’s the eye of the tiger it the thrill of the fight…
wowPowersong!
wowCollaborativerunning
wowNetworkedrunning events
Pedometer
Running shoes
iPod nano
Nike+ website
Tracking tools
Music
Powersongs
Desktop widgets
Sport iMixes
Voiceover feedback
Synched tracking
Collaborative running
Networked running events
Nike+ sportsband
wowowwow wowow wowow wowow wowow
Manage your platform for
delivery
wow
Draw from a wide area of unmet needs
Evolve your repeatable
process
Plan and stage the wow
experience
The Long Wow
wow wowowwowwowwowwowwowwow
Are you building a platform that can create
wow moments over the long haul?
The experience is the product.
Focus on experience.» Use experience as strategy.
Focus on the lives of customers.» Understand people as people.
Embrace the complexity.» Use systems to support experiences.
Engage in design as an activity.» Design as an organization competency.
Goals of the book
Articulate a new approach to creating products and services in an uncertain world
And address a gaping hole in how companies serve people
362 firms
95% say they are “customer focused”
from “Closing the Delivery Gap” by Bain & Company
How many of these firms’ customers agree that they deliver a superior experience?
8%
80% say they deliver a “superior experience”
Peter Merholz [email protected]
Short, but powerful. Easy to read, yet profound. I’ve been searching for just this book: the one perfect book that summarizes the essence of modern product design. This is it... I will use it in my courses for MBA students. You should use it for, well, for everyone.”
— Don Norman, author Design of Everyday Things
SUBJECT TO CHANGEcreating great products and services for an uncertain world
Additional Photo Credits
Slides 78, 79, 82. "Basinghill path" David (satguru).http://flickr.com/photos/satguru/2301780965/
Slide 80. "Vincent Massey Park - Path?" Alison C (Allie in Wonderland).http://flickr.com/photos/allie-in-wonderland/1810364260/
Slide 80. "The road/pavement markings." Matt Seppingshttp://flickr.com/photos/chumpolo/165026463/
Slide 69. "Loyal Pal" (dennis and aimee jonez)http://flickr.com/photos/jonezes/233928794/
Slide 75. "blue line" Crispin Semmens (conskeptical).http://flickr.com/photos/conskeptical/292241229/
—all photos some right reserved: Creative Commons http://creativecommons.org/licenses/by/3.0/
August 12-15, 2008San Francisco
Featuring Don Norman, Jensen Harris, Indi Young, Bruce Sterling, and people from Google, TheDailyShow.com, IDEO, Zipcar, and more!
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