Here’s a presentation I recently put together on digital strategy and what Web 2.0 could mean to a fictional jewelery company. It rapidly introduces some of the key concepts then presents a customer journey through a “what if” scenario. Apologies for the poor audio!
[slideshare id=1140985&doc=cdocumentsandsettingsmmcneilldesktopmarc02-projects45-dtcjewellery-090313063919-phpapp02]
Bubblegum generation presents a compelling model for Apple’s iPhone strategy:
1) Pick an industry which sucks (ie, imposes significant nuisance costs/menu costs/externalities on consumers)
2) Redress the imbalance by making something consumers love
3) …Which disrupts the long-standing industry equilibrium, and shifts market power
4) Use said market power to redesign (a hyperefficient) value chain
Don’t think that organisations in industries that suck don’t aspire to “do an iPod”. Go to any proposition development or product strategy workshop and it won’t be long before someone is mentioning Apple products. Yet all too often they fail to do anything truly revolutionary; they end up doing something different rather than “Redress(ing) the imbalance by making something consumers love”.
Do customers want something that is different or something that is just better?
Interestingly, little functionally in the iPhone is new. Like every other phone on the market it makes phone calls, sends messages, receives emails, takes photos and allows users to listen to music. Nothing different or new there… other than being better than every other phone on the market.
What Steve Jobs espouses is the experience of the phone. He says “So, we’re going to reinvent the phone. Now, we’re going to start with a revolutionary user interface… Now, what’s the killer app? The killer app is making calls! It’s amazing, it’s amazing how hard it is to make calls on most phones.”
He’s not looked to do anything radically different, rather do it radically better.
So how do you bring revolution to your product set? Rather than trying to be different, why not try to better. Make something that consumers love?
Take a leaf from the Apple book and focus upon the experience. Design and attention to detail are critical. Moving beyond purely functional and satisfying products to crafting experiences that engage the emotions. In agile product development it is often easy to focus upon delivering functionality that is perceived to deliver business benefit, yet end up with a mediocre product that has little resemblance to the original idea it was meant to become. Incremental delivery is a key feature of agile; it means you get stuff out there early and often. The challenge is to identify what that stuff is. To make something that consumers love using the agile approach, in addition to great developers and focussed project management, you need three people;
1. A passionate sponsor who has a dream and a vision and can articulate that to the team, banishing mediocrity from the outset
2. A business analyst who will help the team slice the functionality according to consumer needs and desires; that take the consumer of the journey they want to travel, not a predefined route that constrained to picking those features that eventually will deliver greatest value.
3. A customer experience architect, interaction designer or graphically minded usability dude who can champion the product aesthetic and usability.
Get them on your side and maybe you might be taking the first step on developing a better gizmo that your consumers will love, and sleep outside your retail outlet for hours to buy one.
My Great grandfather worked in a bank. He probably witnessed the introduction of the adding machine. Even then his work life would have revolved around the quill and ink; double entry book keeping, maintaining the accounts in journals and ledgers. In those days they were real journals and ledgers. And in balancing the books he would be reconciling data from one paper record to another.
Almost 100 years later and I recently found myself working for a bank… And I’m talking to people whose work lives, like my Great Grandfather’s, revolve around journals and ledgers. Only now their adding machines and the books have been replaced by systems.
Yet 100 years later their jobs remain similar to my Great Grandfathers. They are still reconciling data from one paper record to another. But it is no longer the journals themselves they are reconciling; now they are reconciling printouts of excel spreadsheets.
If IT was supposed to automate banking processes, take away “human error” and do away with reconciliation differences, IT professionals have failed to deliver on the promise. Indeed they’ve made things worse. The books may balance in one system, but add a few more systems, across the globe then things go a bit 1910. Manual reconciliation is still someone’s day job. It’s a sad fact that banking hasn’t really moved on in all that time.
You’re running a workshop and the group have come up with a bunch of new propositions. You want them to vote on which ones to take forward to the next stage. Or maybe you’ve identified a bunch of functionality and features and you want the group to prioritise what they’d like to see built first. What question you ask the group next is critical to the answer you will get.
You need to frame the question appropriately and make it clear to the group the criteria by which they are making their vote…
Do they need to be thinking about “do-ability”, the ease to implement, or do they need to be focussed upon the innovation and the idea itself. Should they be considering the cost to implement, time to market, return on investment, or should they be thinking about the art of the possible; the “blue sky”; the destination, regardless of the journey to get there.
Which line of thinking they should use will depend upon where you are in the process. Get them thinking about practicalities of implementation too early and you are likely to dilute the vision. Too late in the process and you will have candidate propositions or features that by their complexity or uncertainty will never the light of day.
So two tips. Before you ask the group to vote, or to prioritise, clarify the objectives and the critiera by which they are to decide. Maybe ask them to assume a ‘persona’ and vote in the way they’d expect the persona to vote, for example a customer will have different priorities to a developer. Whose vote is it anyway?
And after they have made their vote make sure you manage the group’s expectations. Don’t let them leave the room thinking what they’ve decided upon is final and binding. It rarely is.
Should “the business” care about IT? Should an investment bank trader know anything about XML, or a marketeer know anything about SQL? Probably not. Even less so should they be talking to their IT colleagues of their requirements in these terms. The business should speak to IT in a language of value driven requirements rather than implementation detail. Yet in many organisations (where IT has historically had a track record of failure), the business has taken a greater interest in IT delivery. They start talking the language of the techie. When this starts to happen business operations no longer see the clarity of their business. They see systems. In an investment bank setting: the trade is booked in Zeus. Settlements are handled by Minotaur, payments by Socrates. Corporate actions are handled in Hades. Depending upon the geographic region, client management might be handled by Tomsys, Dicksys or Harrysys. You ask a business person what do they do and they talk in terms of systems. Getting down to the underlying requirements of what they actually want to do is hard. Innovation and creative thinking are hard because we always return to what the limitations of the current systems are. Why there is a requirement for a Reconciliation System rather than asking why there needs to be any reconciliation in the first place.
So here’s a suggestion. Act dumb. Forget everything you know about the way you do things and go back to first principles. How would things be if we were starting from scratch. How would you describe your business intent (not the what you do now, rather what would you do) if you had to explain it to a novice who was starting a competitive business to put your business out of business. I doubt the word system would come into the description.
The humble potato is not worth a lot. The farm gate price for a 150g spud is negligible. How do you add value? How do you turn a worthless Maris Piper into a valuable commodity?
Potato crisps (chips) are a great example of a low value product being turned into high value one.
But that’s the easy part. The real value add is further transforming the product without fundamentally changing it. Innovation through packaging and marketing, making a basic product appear more desirable. Appealing to higher sensations beyond just satisfaction; differentiating the same basic product into an up-scaled, up-market luxury item. The same item that customers will happily pay more for.
The retail price for a 50g bag of Walkers Salt and Vinegar crisps at my local One Stop is 35p. The price of the Sensations bag is 47p. (For reference the retail price of a 50g potato – is 5p). Now I’m no crisp expert, but I’d guess that the incremental cost for adding a couple of new ingredients to the flavour is marginal. There’s some sunk cost in product development- creating the new flavours and developing the new brand, but this is little effort compared to the benefits that will be accrued.
But that is not the end of the story. Focussing upon the experience of the Sensations product, Walkers see an opportunity to change the packaging – to increase the bag size. Now their basic Sensations product is a whopping 150g bag that retails at £1.35.
Sometimes it is easy to focus upon just delivering the basic package, to just satisfy the customer. Is there anything you can do on your project to transform delivering the hygiene of customer satisfaction, to selling a compelling value-added experience?
Talking about workshop icebreakers with Prashant and here’s an idea: participants write their own tombstone or obituary. “Here lies Jack. A life spent comparing numbers on an excel spreadsheet”…. You could even use Tombstone Generator to bring them to life:
Hmmmm, maybe not the strongest icebreaker (indeed it could kill your workshop before you’ve even started… If you don’t consider cultural sensitivities you could receive some rather blank looks, if your audience doesn’t have a dry sense of humour or doesn’t “get it” you’ll be in trouble…)
So maybe it won’t work so well with people, but how about systems? If you are looking to understand the current system landscape, why not ask the participants in your workshop to list out all the systems they can think of and ask them to write the inscriptions that would appear on the tombstone.
For example…
+
Customer System RIP
1997-2007
Dearly beloved wife of Position System and bastard child of Excel spreadsheet (1991-date).
Threw tantrums and refused to give the right answers when it really mattered
Grew bloated in size due to unwanted change requests
Lost self worth due to non-business value changes
(Died in the loving hands of Indian Outsourcing Company)
She will not be missed
+
Here Lies Position Reconciliation Spreadsheet
1991-2007
Father of Every Conceivable Problem
A real handful to manage but usually got there in the end
Local resident of Sarah’s Desktop, he never got out much
Prone to occasional lapses of judgement that were rumoured to cost the bank millions
He has gone to a better place (recycle bin)
And why restrict this to the current state. It could be a useful exercise in understanding what benefits a new system could be remembered for…
+
Here lies New System
2007-2017
Saviour of the Back Office
Banished reconciliation breaks to history
Defeated the multi-headed Legacy Dragon, bringing peace and harmony to the Ops team
A single voice of truth
Beautiful to look at, easy to get on with, she gave such joy to customers and added such value to the business
Without her Ops can no longer function
Anthony Bourdin in Kitchen Confidential writes “Good food is very often, even most often, simple food. Some of the best cuisine in the world… is a matter of three or four ingredients. Just make sure they’re good ingredients, and then garnish them. How hard is that?”
How hard is that indeed. There’s a lesson there for building out your product set. Are you doing the simple stuff well?
Another meeting, another executive talks about the need for innovation and creative thinking and pushing the boat out and beating competitors with something new. Meanwhile, doing the the simple “hygiene” things that will delight existing customers (reducing customer attition and churn) get lost with the innovation hyperbole foccused on “capturing market share”.
Here’s a bunch of marketing trends for 2007, predicted in In December 2006. A year is a short time period, we are already more than a quarter of the way through the year – how many of these trends are making inroads beyond the pure play eCommerce offerings. How many are filtering through into FTSE 100?
Not many is my hunch. How familiar is it for the marketing department to come up with an idea, only to have it disapear into the IT quagmire of architecturual incompatibility, budget constraints, change requests and innovation inertia? And of the list of 7 trends, the one that will probably get most traction in the corporatesphere is contentcasting. Trouble with that is, it is one thing to syndicate your content as RSS feeds, but who will consume it?
OK, so not the finest photo in the world, but it is the innovation that is important. Problem: crown-caps on bottles require bottle openers. No bottle opener = improvisation = damaged furniture / cutlery / hand / teeth. And here’s an elegent solution, a ring-pull crown-cap. Same bottle experience only easier to access. Nice.