His Legacy

In countless tributes to Steve Jobs, Apple devotees are understandably praising him for redefining several consumer electronics categories — the computer, the mouse, the MP3 player, the smartphone and the tablet.

Apple’s sleek devices resonate with users through all the noise and clutter of their lives, whether they’re in Johannesburg, Shanghai or São Paulo.

But Jobs’ impact extends beyond Apple’s wildly successful product line. Jobs not only raised the bar on consumer electronics, he transformed the discipline of design. Due to the universal appeal of his work, he revolutionized the way designers everywhere approach their work.

The gift of flow

Jobs’ most singular gift was his knack for untangling the complex engineering layer in technology to provide a seamless user experience. His devices give their users “flow” — the ineffable state of being fully absorbed as described by psychologist Mihaly Csíkszentmihályi (Flow: The Psychology of Optimal Experience, 1990).

By blending artfulness with precision engineering, Jobs brought us experiences that engage both the left and right brains while appealing to the mind and the senses. In the process, he altered what we want and expect from technology.

Experience designer

Jobs’ impact on design is monumental. As a result of their experiences with his work, a critical mass of designers across every conceivable category has shifted the locus of their attention from the components inside the device to the quality of the user experience. This decidedly human-centic approach, known as Experience Design, is being applied to a growing number of products and services.

Steve Jobs’ genius, determination and uncompromising standards inspired an influential design movement. His paradigm will undoubtedly dominate the field of design for the foreseeable future.

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Images: Courtesy of Apple Inc.

Here is a Design Week – UK  on Jobs’ impact on design, and Yves Béhar’s piece “Steve Jobs Changed My Life”.

Addendum:  An audio interview (NPR, 10/7) with John Maeda, President – Rhode Island School of Design, about Jobs’ influence on design.

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This works well when facilitated, cross-disciplinary teams of employees explore customer scenarios from the customer’s point-of-view. The team considers the customer’s preferences (needs, wants and expectations) as they evaluate relevant system interfaces, business rules and work/information flows.

The facilitator’s role is to be sure the group stays on track and considers touch points from the customer’s point-of-view.  They must also help the group remain mindful of the big picture as participants can become preoccupied with particular sticking points.

In the process, participants are well-served to consider broader questions: What are our target customers looking for, and how has that been changing over time? Why do they choose our product over that of our competitor’s?  How can we further tip the scale in our favor?  What are the benefits versus the costs?

This simple exercise typically results in new insights about service processes that can be rapidly put into practice and supported by the larger organization.

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As always, I’d love to hear your perspective…

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One of the best things about my work is what my colleagues and I call the “hat trick”.  In sports like cricket and hockey, a hat trick is accomplishing a feat three times in a contest.  I’ll explain what a hat trick is in my world and why it’s thrilling to pull one off.

Our mission is to help clients enable their customers to enjoy richer, more satisfying service experiences.

A hat trick is when we not only help clients to better meet the needs of their target customers, but also enable them to increase customer loyalty and revenue. We do all this while also cutting service costs — sometimes up to 20%.  Almost every assignment offers hat trick potential.

Generally, companies recognize the benefits of improving their customer touch points. But behind the touch points, and where we concentrate, is an elaborate ecosystem of people and information distributed across the company’s organizational, geographic, and technological boundaries.

Systems perspective

‘Service system’ refers to the dynamic interplay of people and information used to control customer touch points.  I’m convinced that the service system is a company’s most powerful value-creation engine. High performing companies know that fine tuning service systems to meet the needs of target customers pays big dividends.  We help them figure out how to do it quickly and efficiently.

Our systems perspective enables us to see a client’s business processes holistically rather than merely focusing on particular components.

Systems thinking has been around for a long time, but many companies are built around managing functions — a model of operations management that has its roots in the manufacturing era. Think of an auto plant where each functional unit adds a new component to the chassis as it moves along the assembly line in a linear fashion.

But today’s service processes don’t function like assembly lines. Instead, they operate concurrently and interdependently, transcending traditional organizational boundaries.  Processes must not only operate together cohesively, they must also continually improve the way they function together.

The systems paradigm is universally applicable regardless of the company’s business model or size. It applies just as well to Fed-Ex and Amazon.com as it does to a family restaurant, though the scale and complexity of enterprise-grade service systems are obviously greater than those of smaller businesses.

In larger organizations, processes within the service system are like islands linked by bridges which are seldom joined in ways that are as simple or as seamless as they can be.  In many cases, service systems include processes that are handled by partners that sit outside organizational and even geographical boundaries.  That’s why it’s critical to see, and help others to see, the whole picture.

Four questions

How do we begin? To understand the structure and relationship of processes within a service system, we ask four basic questions:

1. What is being done?
2. Why is it being done?
3. Who is doing it?
4. How is it being done?

After asking stakeholders these questions and probing, we produce a visual map of the service system to enable stakeholders to see patterns in the value creation chain.

By depicting service systems visually, we can identify sources of untapped value and also spot activities that add little or no value. When the stakeholders see how processes work within a larger system, they can more readily see how people and information interact to create value.

It’s fascinating to watch a room full of stakeholders seeing a map of their service system for the first time.  Most “process owners” find it instructive to see how they fit into the overall value-creation process. The mapping exercise helps everyone determine the direction and scope of changes that lead to creating more value — improving customer experiences while saving money.

No two problems are alike. But it’s nearly always possible to reduce complexity, and the savings can fund targeted service improvements.

In the end, the company becomes more competitive and profitable, their target customers enjoy a better experience and, of course, my team and I are thrilled. What’s not to love about a hat trick?

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As always, I’d appreciate learning your perspective on this subject.

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Want more info on this subject?

I recently re-read Peter Senge’s ’94 classic on systems thinking, The Fifth Discipline, and it’s remarkably applicable the challenges of our knowledge-based, global service economy.  It’s still one of the most influential books on the subject.

I’d also suggest a current (2010) book, Systems Thinking for Curious Managers, by Russ Ackoff (“the dean” of systems thinking).  I’d also recommend his insightful paper (PDF), On Why Few Organizations Adopt Systems Thinking.

Related:

I’d also suggest Roger Martin’s new book,  The Design of Business which cites case studies of design-oriented strategic transformations made at P&G, RIM, Cirque du Soldier, etc.

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It feels like we’re at the dawn of a new era in understanding how people — namely our customers — make decisions, and some businesses will benefit enormously. More importantly, customers will soon enjoy more kinds of services designed to better meet their needs.

Our collective thinking is being informed by discoveries in behavioral sciences and behavioral economics about the role of the unconscious mind and the centrality of emotions in driving behavior. Many of these findings are now verifiable through neuroimaging tools.

Among other things, we’re realizing that people aren’t Vulcan-like beings who make choices on a cold, purely rational basis. Individuals — our customers — are complicated and swayed by factors beneath the level of consciousness.

Insights about how people are wired have been rolling in for decades. But lately, these insights have penetrated the mainstream consciousness due, in part, to the popular writers like Ori and Rom Brafman (Sway) and Dan Ariely (Predictably Irrational), among others, who are distilling social science discoveries for mass audiences.

These findings aren’t causing companies to rethink their missions—not yet, anyway. Delta Airlines and Verizon aren’t transforming their business models to accommodate social science breakthroughs, but a subtle and profound shift is occurring.

Out with the old…

I’ve been encountering more clients lately who are moving away from outmoded assumptions about service and toward conducting research to learn what factors drive their customers behavior. Instead of relying on the “if you build it, they will come” principle, businesses are trying to figure out precisely why their customers are buying, or not.

For example, the traditional service model emphasized customer satisfaction (“C-Sat”) which many practitioners still believe is predictive of repurchasing behavior. C-Sat has been universally regarded as a proxy for service quality, but research shows that emphasizing satisfaction alone is an overly narrow focus.  Multiple drivers, unique to each context, play a far greater role in influencing customer loyalty.

In fact, research shows that customers will tell a service provider that they’re ‘satisfied’ yet switch away from the brand for any number of reasons.  Ironically, a majority of people who defect reported that they were ‘satisfied’.

Recently, my team assisted a U.S. retailer that had been suffering from declining retention rates. The company wasn’t aware that their new interactive voice response (IVR) menu frustrated customers who’d been reporting that they were ‘satisfied’ overall.  By asking exacting questions and conducting a proper analysis, the company was able to prevent further market damage.  The fix turned out to be cheap, simple and quick.

The big news isn’t that companies are rejecting C-Sat, but that they’re taking a refreshingly thoughtful, behaviorally-grounded view of their customers which is opening the door for interesting, potentially sweeping changes.

Not so long ago, presenting behavioral research to the “C-suite” caused their eyes to glaze over. Now, forward-thinking leaders are requesting this information to support their business decisions.

What’s next?

It does feel like we’re entering a new era in understanding customers, but we’re only in its nascent stages. Applied behavioral psychologists don’t yet have a seat at the table, but the business community generally seems to be more receptive to their findings.

I think we’ll recognize the next stage when traditional organizations focus on using behavioral research to design services that are more compatible with human needs. Until then, keep your eye on the agile, innovative companies who are internalizing insights about their customers.  You’ll recognize them by their customers who are enjoying richer, more immersive service experiences and returning for more.

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As always, I’d love to hear your views on this subject….

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Want more info on this subject?

Scholars who are contributing to the growing body of social sciences and economics knowledge include Amos Tversky, Daniel Kahneman, Richard Thaler, and Robert Shiller.

Here’s info about my company’s (Osprey) decision-support services and Customer Insight Lab.

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Downtown Cape Coast, Ghana

Pulsating business scene

I spent the last couple weeks on assignment in Accra, Ghana. On this trip, I’ve seen more growth than any time since my company started working there in ’07. This is a period of unprecedented business activity and promising new projects within and beyond the mobile sector.  Meanwhile, new competitors from around the world are streaming in. This corner of Africa’s business scene is pulsating.

Astute businesses here are taking steps to preserve their client base and deepen relationships with their customers. We’re privileged to work with a new generation of African business leaders with the courage and determination to transform their offerings to meet the needs of an emerging class of consumers.

These are exciting times to work with African business leaders who take seriously their mandate for investing in new technologies and business practices.  We’re helping them gain competitive advantages by improving the service systems that support touch points, by adding new service channels, and by harvesting business intelligence, among other initiatives.

Building competitiveness

The most effective strategy for businesses to gain a competitive edge here is to understand and meet the customer needs better than their rivals.  Forward-thinking leaders here know that competing on service will help preserve their customer base and attract new customers even as the marketplace grows more crowded with aggressive new entrants.

Developing insights about customers’ preferences and purchasing drivers helps companies here achieve competitiveness as well as profitability.

It also creates jobs. Thriving regional businesses are Africa’s greatest engine of job creation and economic growth.  That’s why we’re committed to collaborating with leading African businesses, knowing that their success means more jobs and higher living standards across the region.

What it takes to work here

This question comes up frequently in my circles. I think Western companies operating here require a distinctive set of leadership and communication skills. Traditional business skills are necessary but not sufficient to address the complexity and scale of challenges on this continent.

But what’s needed for Western companies to operate effectively in this environment? We’ve explored this question with business leaders in various sectors as well as academics, entrepreneurs, and technology innovators.

Our conclusion is that it’s not enough to bring an open mind. We must be skillful listeners. That means checking our assumptions at the door and listening with the intention of gaining deeper insights about the market and, most importantly, the customer.  Deep collaboration with partners and clients is key.

Africa’s dynamism and complexity require going beyond merely tolerating ambiguity. Ambiguity, a ubiquitous feature here, must be embraced.  “Leaning into” uncertainty is critical to problem-solving in this market.

It’s critical to drop the need for control, otherwise it’s tough to handle the inherent ‘push-pull’ of a region that’s steeped in tradition while it grows so rapidly.

The ability to consider competing, often “fuzzy” options helps us work with stakeholders here to produce the imaginative, yet practical solutions that the region demands.

Finally, operating in the region requires extraordinary levels of patience and perseverance.  Change rarely happens in sweeping strokes here. Instead change occurs through “successive approximations”.  One step forward, two back but always moving ahead.  Patience — never my strongest card — is essential.  (Note: I’m working on it.)

People, Process and Technology – Redux

Succeeding here requires mastery in choreographing people, process and technology, and we help clients focus on all three dimensions — what we refer to as “service systems”.  Of the three, ‘people’ is the most critical and challenging to optimize.

Africa’s leading companies are now investing heavily in their people because they know, in the end, that this the only sustainable ‘differentiator’.

On this trip, I observed how one company in particular, a leading business process outsourcer and partner, transformed its organization into a high performance business by nurturing its talent.  It accomplished this feat by fostering competition among its teams while encouraging buy-in and autonomy among team members.

Watching their evolution over time has been both heartening and instructive. Today, I’d stack them up against any competitor in the world. This kind of innovative, customer-focused organization is poised to meet the needs of customers in any market.

Lessons from Africa

Like all prior trips to Africa, this one was a valuable learning experience on several levels.  I encountered a new generation of leaders and was impressed by their willingness to invest in becoming more competitive. The vitality of the continent’s nascent mobile-web industry is breathtaking.  Keep an eye on this exciting space…

I also learned more about my company on this journey. I’m reminded that what separates us from our peers is our passion for and commitment to producing substantial results for our clients and their customers across the sub-Sahara.  It’s energizing to work on a continent of one billion people whose economic growth is only surpassed by China, and I never forget what a rare opportunity it is.

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What do you think?  I’d appreciate hearing your perspective.

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Want more info on this subject?  You’re not alone.  There’s a plethora of books about conflicts and coups in Africa, but there are fewer resources about doing business on the continent.  I’ve previously recommended Paul Collier’s ’07 book, The Bottom Billion, which remains relevant.

In ’07, TED organized Africa: The Next Chapter, a series of talks which included the first TED conference held on the continent.  The series featured a stellar lineup of speakers on a range of topics about Africa.  Since then, TED has added new presentations about business development in Africa to the series, and  I heartily recommend it.

Here are some of my prior posts about the sub-Sahara.

I’d appreciate hearing your recommendations about resources on this topic.

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One of the more satisfying experiences at year’s end is reaching out to clients, partners and colleagues to thank them for their business and their stalwart support.  It’s even sweeter this time while reflecting on an entire decade going back to the early days of my business.

We come from different cultures and work backgrounds, but what binds us together is an abiding interest in bringing value to our customers, and clearing the hurdles that come with that mandate.  My mission has been to gain a deeper understanding of  what customers need and designing solutions for delivering it. My commitment to that mission is stronger than ever.

I can’t say for sure what’s next in business trends — no one can — and I’m not offering my top ten predictions. But, if past is prologue, we’ll need to be more imaginative, collaborative, and courageous than ever.  We can and we will, because we must.

Every project offers a fresh opportunity to do something that’s never been done before, and there’s nothing more thrilling that that.  I’m excited about new projects on the horizon waiting to be cracked.

Looking back, trips to developing regions like the sub-Sahara are reminders that we who are fortunate to be doing what we enjoy must recognize the steeper challenges faced by others. We’re obliged to devote a fair portion of our time and resources to reducing the suffering of others.

So, there’s much to be done.  Let’s get on with it…

I wish you a Healthy and Prosperous New Year!

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Over the last few weeks, my colleagues and I presented value propositions to separate audiences in Europe, Africa and the Middle East. Clients in each of these markets face unique challenges and opportunities to be sure. Our offerings addressed their different needs, but our approach is fundamentally the same everywhere.

Our work consists of three steps:

1)      Develop a better understanding of customer needs by getting closer to customers and engaging them wherever possible,

2)      Use customer insights to continually improve offerings,

3)      Deliver a customer experience that’s better than the rest.

The good news is that these steps apply to clients everywhere, despite cultural variations. The not-so-good news is that succeeding with these steps is almost impossible unless there is substantial buy-in at the highest level in an organization.

We’ve learned that it doesn’t pay to work with companies that aren’t “customer-centric,” no matter how attractive the opportunity appears on paper.

Let me restate the lesson. If the person or team that sets the tone for the organization doesn’t see the inherent value of improving the customer experience, there is little that our interventions can do to move the performance needle.

Putting it another way: the organization’s “champions” must know, at the time that we’re presenting our value proposition, that it pays to improve their customer experience.

This is our “smell test”.  And, it’s crucial to run this test early in the conversation with a client—the earlier, the better. When we encounter a prospect who doesn’t pass the test, the smartest move is to politely step away from the table.

The  opportunity costs of  choosing inappropriate assignments can sink a company.  Our organization thrives when we concentrate on assignments that improve the way our clients relate to their customers.

Let me be clear. We’re not looking to avoid tackling difficult problems. Working though vexing challenges keep us sharp;  they give us the confidence to set our sights higher.  Looking back, partnering with the “right clients” to solve daunting challenges have been our most satisfying and beneficial assignments.

Who are the “right clients”?

For us, the “right clients” – whether they’re in Baltimore, Brisbane or Berlin – know they’re in the business of serving people.  Whether they’re airlines or retailers, they know that winning the hearts and minds of their customers is the true test of a market leader.

Once we recognize that a client accepts this principle, our mission is clear: help them out-perform the competition.

That’s what we do.

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As always, I’d love know what you think.  How does your company choose which opportunities to pursue and which ones to avoid?  Have you made exceptions to your selection criteria?  If so, how did that work?

Related:

Want to know more about Opportunity Costs?  www.investorwords.com offers this definition:

“The cost of passing up the next best choice when making a decision. For example, if an asset such as capital is used for one purpose, the opportunity cost is the value of the next best purpose the asset could have been used for.

Opportunity cost analysis is an important part of a company’s decision-making processes, but is not treated as an actual cost in any financial statement.”

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