Last July, Kenya became the first sub-Saharan country to launch an open data government site enabling its citizens to gain access to vital information. After only six months, Kenya’s Open Data Initiaitve (KODI) is still a work in progress, but it’s already reshaping Kenya’s culture of government.

When KODI was launched, Kenya was only the 22nd country with an open government portal. Today, 30 countries have live, open government sites, though dozens of other countries are in some stage of developing their own. Kenya’s early adoption is due in large part to the efforts of open data advocates both within Kenya’s government and among its influential technology community.

Whether Kenya’s open government will have a lasting, positive impact depends on how Kenyans use the information over time. But KODI’s successful launch illustrates what’s possible when government and technology converge to serve the needs of society.

Many stakeholders, one vision 

Last month, the World Bank released a detailed report about KODI that serves as a case study for open government advocates and practitioners everywhere. Among the takeaways, one can learn how a diverse group of stakeholders from the public, civic and private sectors coalesced to do something tough but important, despite their differences.

Gathering, structuring and publishing large data sets presented KODI’s developers with complex technical challenges. The portal makes available hundreds of data sets from the country’s 2009 census, and from health, education, infrastructure, water and sanitation services. The World Bank provided its development data.

Dr. Bitange Ndemo, Kenya’s Permanent Secretary of Information and Communications was the project driver with vigorous support from Paul Kukubo of Kenya’s ICT Board, and various government agencies.

To garner impetus and support, Ndemo forged a series of critical partnerships with the World Bank and Google, which both provided technical assistance, as well as with a host of local teams.

The platform is powered by Socrata, a Seattle-based company that fashions platforms for local, state and federal governments in the U.S., including open data sites for the city governments of Chicago and Seattle.

Choosing a U.S. firm’s platform rather than to use local developers raised initial concerns. But given the project’s aggressive timetable, the team settled on Socrata, one of only a few companies in the world with the capacity and experience in handling mammoth data sets.

Kenya’s celebrated technology community was instrumental in moving the project forward. Nairobi’s iHub, an “open space” community for developers, played a critical role, as did Ushahidi, the country’s homegrown crisis-mapping agency. (iHub developers built a mobile app enabling a user to locate Constituency Development fund projects and add images of them. The Ushahidi team mashed up census data with health services data on their Huduma site.)

Giant Leap forward

KODI’s launch marks a new chapter in Kenya’s government. Only four years after the country was rocked by post-election violence leaving 1,000 people killed and over a half a million displaced, Kenya fulfilled its mandate of providing citizens with unprecedented transparency and accountability.

Kenya’s President, Mwai Kibuki observed, “Data is the foundation of improving accountability and governance.” Dr. Ndemo tweeted, ”Data will fuel employment and wealth creation like never before.”

In his comments about the initiative, the The World Bank’s Tariq Khokhar, an open data evangelist, said, “Open data in Kenya is special: it comes at a time of national change; it’s got a head start on tools and expertise from the global open data community and it’s happening in a country where the information ecosystem is still maturing.”

The World Bank’s Country Director, Johannes Zutt remarked, “This portal is one of the first and largest government portals with reusable data in sub-Saharan Africa, making Kenya one of the world’s leading exemplars of open data.”

Alex Howard (@digiphile) of O’Reilly Media said, “Open Kenya isn’t simply about meeting data standards or publishing data online. Ultimately, it’s about changing the compact between citizens and their government.”

KODI’s development model can serve as a roadmap for other countries committed to realizing open government. Its successful launch is further proof that open government is an idea whose time has come.

At a time when politics is dictating social agendas in many countries, Kenya’s open government initiative is a testament to what a society can do when it focuses on what really matters.

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More on this subject?

Have a look at Alex Howard’s thorough piece, “GOV 2.0 2011 – Year in Review” and his earlier article, “Open Government Data to fuel Kenya’s App Economy”.  Here’s a post about KODI on the Ushahidi blog.

The OpenGovPartnership noted (1/31): “Now that Kenya has launched its open data portal, the OGP taskforce is becoming less focused on the programmers and more focused on civil society leadership. This week, Kenya’s open data initiative organized a workshop (with the World Bank and the African Media Initiative) for media leaders and journalists…”

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His true legacy is that he made the digital analogue. He turned ‘stuff’ into enduring delight. And what one business would have seen as irrelevant, expensive design detail, he made glorious, emotional connectivity. ~

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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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Using a longer lens

It’s been twenty years since the publication of Peter Schwartz’s insightful primer about scenario planning, The Art of the Long View. In the book, Schwartz makes a convincing case for using scenario planning in approaching strategic challenges of various kinds.

Schwartz, who led scenario planning efforts at Shell, Motorola, and Pacific Gas and Electric, concluded that the technique could be applied to handling the emergent complex threats that companies were confronting in the 90′s.

Since then, the world has grown radically more complex, more uncertain. Globalization and the Internet have woven together our institutions so that a crisis in one corner of the world can spread virally with far-reaching consequences.

Cascading consequences

We now live in a world where an unknown street vendor in an obscure Tunisian village sets himself on fire and a few weeks later the dictatorial regime in Egypt collapses. Those events triggered spiraling oil prices which boosted worldwide food and commodity prices with a cascade of far-reaching consequences.

While leaders can’t predict the next cataclysmic event, they must now contend with a wider range of plausible, discontinuous threats. Failure to do so can imperil their institutions.

In a world where traditional, linear thinking is inadequate, scenario planning is a platform for enabling problem solvers to explore the question: “Given what we know, and what we don’t know, what should we do now?”

That’s a significant question, but it’s not enough to simply ponder significant questions. Problem-solvers must also overcome the internal barriers – psychological as well as physical – which can paralyze organizations when the stakes are high. Scenario planning provides a context for examining assumptions and biases, and for avoiding the denial that ensues when facing existential threats.

Schwartz observes, “When decision-makers begin to look at the future, denial acts as an automatic shut-off valve: ‘I can’t consider that…’ A good scenario asks people to suspend their disbelief long enough to appreciate its impact.”

The Singapore Miracle

One of the more celebrated scenario planning cases is the Singapore story. That nation’s government first used the technique to help build its nascent entrepreneurial society in the 70’s and 80’s, and later to cope with a string of discontinuous shocks that threatened its economy including the Asian financial crisis of the 90’s.

Since then, Singapore has embedded the technique in its strategic planning efforts. Scenario thinking helped its leaders to recognize that in a region increasingly dominated by its giant neighbor, China, their nation must become an innovative technology hub. (Singapore’s mantra says it best: Anticipate change, stay relevant.) As a result, the government is investing $12 billion USD in technology R & D over five years — a 20% spending increase — to attract gifted engineers and entrepreneurs.

Lessons from the field

My own experience with scenario planning in a variety of settings has been overwhelmingly positive. It remains one of the more advanced tools in the strategic arsenal. My appreciation of the practice has only grown over time.

I’ve learned this: Convene the right problem-solvers under the right circumstances and they’ll reach a shared understanding, despite differences in perspective. Scenario planning helps organizations to recognize threats, opportunities and weak signals, and it often leads to practical solutions that everyone in the room can support.

When The Art of the Long View was published in ’91, scenario planning was deemed a novel technique for organizations facing rare and unusually complex issues. Today, most of our pressing challenges are laced with complexity — that’s our new reality.

If we’re going to prepare for what’s next, let’s bring in our sharpest minds and give them the tools to move the enterprise forward. I’m pleased to report that scenario planning is still the right tool for the job.

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As always, I’d appreciate hearing your views…

Want more info on this subject?

1. One of the more interesting critiques of Schwartz’s book is found in a video dialogue between Niall Ferguson and Schwartz
2. Here’s an insightful talk (video clip), The Singapore Miracle & Gov 2.0, by Peter Ho, Singapore’s former head of civil service, who explains his country’s work with scenario planning. Peter Schwartz is also featured
3. More on scenario planning is at Global Business Network (GBN), co-founded by Schwartz
4. Have a look at the World Economic Forum’s on-going scenario planning initiatives
5. Mats Lindgren’s ’09 book, Scenario Planning–The link between future and strategy
6. Bonus: An hour with Lee Kuan Yew, former PM-Singapore and author of ‘From Third World to First : The Singapore Story: 1965-2000′  on Charlie Rose (3/28/11)
7. Here’s a look at the Decision Support practice at my company, Osprey.

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In tracking the activities and relative successes of his subjects, Dunbar found that the greatest number of breakthroughs occurred not when scientists were peering into their microscopes, as one might suspect, but when they were talking with one another at meetings.

Why? When chatting with their colleagues who worked on other projects, the researchers tended to re-conceptualize their own work to be understood. In doing so, new ideas emerged and, occasionally, some were fruitful.

Johnson concludes that social networks, like those of Dunbar’s researchers, engender new ideas, or to put it another way, “chance favors the connected mind”.

Similarly, Matt Ridley (“When ideas have sex”) observes that the free exchange of ideas on the shop floor leads to breakthroughs. Idea exchange propagates recombinant ideas. (As technology brings us together, he argues, more of our ideas are likely to “meet and mate” creating greater innovation.)

Most of us can think of examples when discussing our work with colleagues from other practice areas forced us to translate our thinking so that it made sense to them. Perhaps they followed-up with questions that prompted us to step back and re-imagine what we do, if only briefly. In the process, a subtle but important shift may have occurred.

The mingling of people and their ideas is a crucible for new ways of thinking. It’s possible that bouncing ideas with colleagues over a morning coffee before we scurry back to our offices may be the most productive part of our workday.

It’s both counter-intuitive and reassuring to learn that conversation, one of the most basic human activities, and one that’s easy to stage, offers the most potential for engendering new ideas. With that in mind, let’s enjoy our morning coffee together, shall we?

***

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Want More?

Here’s Steven Johnson’s TED Talk and Kevin Dunbar’s paper (PDF), “What Scientific Thinking Reveals About Cognition”.

Have a look at Matt Ridley’s intriguing new book is The Rational Optimist.

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It’s been a hectic summer crisscrossing the Atlantic on planes. I enjoy catching up on reading during long flights but hate schlepping books, so the iPad is a Godsend.  One of my favorite resources is WIRED Magazine’s app developed by Adobe Digital.

The app lives up to its hype of providing an immersive, highly interactive experience.  Gorgeous images and crisp typography rotate with the device, and the layout is sexy.  Apps like this are transforming the way we experience information, and we ought to be mindful of that.  The implications are enormous.

This isn’t an app review, but rather an observation and a suggestion that digital publications like WIRED Magazine are having a profound impact on our aesthetic sensibilities. “The iPad effect” is changing the way we experience information and there are implications for all of us interested in connecting with our audiences.

Death by and of PowerPoint

Curiously, the idea for this piece came not from something I viewed on an iPad, but on a conference room screen where PowerPoint slides were presented by a software vendor.  The salesman, “Frank” (not his real name), was trying to convince my colleagues and me to buy his company’s well-known, hosted CRM software.

The slides were mind-numbingly predictable. An “agenda” slide was followed by seemingly endless “features and benefits” in bullet form, followed by the predictable “next steps” which, thankfully, signaled the end of the ordeal.  Sound familiar?  I remember looking at my watch and thinking, “Forty-five precious minutes lost forever.”

Of course Frank’s intent was to convince us of his “value proposition,” but I came away with the impression that his company is out of touch. His pitch created doubt in my mind about the brand.

Sadly, I’ve endured countless corporate slide decks like that before, but I don’t recall ever feeling such aversion. The contrast with the sleek tablet apps I’d been seeing made Frank’s presentation seem like a relic from the Industrial Age. The starkness of the contrast is the “the iPad effect”.

Design-forward apps are exposing us to more compelling images and interactive features, and we who rely on presenting information to influence audiences ought to take notice.

Redesigning Design

The need for rethinking our presentations isn’t new.  Edward Tufte and, more recently, Garr Reynolds (the Presentation Zen guy) have been preaching — often to the converted — about how and why our presentations need a makeover. The “information architecture” movement has been raising awareness about design literacy for decades.

But old habits die hard. Despite the consciousness-raising, ‘Death by PowerPoint’ still takes a heavy toll in business. Now comes the iPad to show us what’s possible. A new visual design zeitgeist is emerging and there’s no going back.

This is just the beginning — this is the first generation of iPad apps. The designers are figuring out how to make the next iteration sleeker and more interactive. Subsequent generations of apps with more alluring layouts are on the horizon.

What are the implications? It’s time to put the old paradigm to rest. Design is the next frontier, and that’s good news for those of us craving a change.

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What do you think? As always, I’d love to hear your views on this subject.

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Want more info?

Some brilliant ideas concerning the “design behind the design” are found on Boxes and Arrows. Related: design thinking helps us to radically re-imagine the way we solve problems in business. The design firm, IDEO, has some terrific resources.

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Distinguished scholar and visionary

The distinguished business scholar, C. K. Prahalad, died unexpectedly last week of a lung ailment at the age of 69. His contributions to the pursuit of business strategy and innovation are unparalleled.  He’s had an enormous influence on my work and that of my peers.

Dr. Prahalad was more than a celebrated management guru, he was a visionary.  He redefined the way that a growing number of global businesses deal with developing markets, and he helped to shape a new economic paradigm.

The Indian-born Prahalad received his doctorate from Harvard and taught at the University of Michigan’s Ross School of Business, but he never strayed far from contemplating the social and economic issues that affected his native India.

A recurring theme in his work concerned the centrality of the customer in today’s global, interconnected marketplace. He urged business leaders to “co-create” or develop products in tandem with their customers.

During the much of his career, his focus was on corporate strategy at multinational enterprises. Among his  notable works were “The Core Competence of the Corporation” (Harvard Business Review, May-June, 1990), and a 1994 book,  Competing for the Future, both of which which he co-wrote with Gary Hamel.

The Bottom of the Pyramid

However, C. K. Prahalad is best known for his 2004 book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits.  In that work, he argued that businesses stand to reap benefits from serving the world’s poorest people or those at “Bottom of the Pyramid” (BoP) who live on $2 or less per day and who comprise a majority of the world’s population.

“Four billion poor can be the engine of the next round of global trade and prosperity,” he wrote.  “If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.”

His view of serving consumers in emerging markets, or “inclusive capitalism”, was eye-opening for many business leaders who had long ignored the needs of the poor and, in so doing, missed important opportunities.

Accessible and affordable products

Dr. Prahalad identified several obstacles in serving BoP consumers. For example, he observed that poor consumers typically have unpredictable income streams and they subsist on daily wages. They tend to buy only when they have money on hand, and only what they need that day.

Accordingly, he pointed out that single-serve packaging, for items like shampoo, condiments, tea and coffee, and aspirin, is well suited to this population, noting that a single-serve revolution is sweeping BoP markets.

In order to make products accessible and affordable for BoP consumers, Dr. Prahalad challenged business leaders to re-think traditional value chains by determining which components can be outsourced and which need to be “centralized” to minimize costs while maintaining quality.

Dr. Prahalad also recognized that emerging markets are “laboratories” for innovation.  He argued that reverse or “trickle up” innovation — goods and services made in and for developing markets — can transform industries in developed markets.

Examples  of “trickle-up” innovations include micro-lending, mobile-banking (“M-banking”), low-cost mobile phones, low cost hotels, and even car manufacturing where Tata Motors’ Nano – a car made for Indian consumers that sells for $2,000 USD – is slated to be sold in developed markets.

Lessons learned

Western businesses have only begun serving BoP markets, but a growing number of us are learning from consumers and entrepreneurs in developing markets about how to restructure our own business models.  The lessons we’re learning about lean manufacturing and virtual distribution chains from BoP markets are already transforming global markets.

The most profound change that we in the West have in serving BoP consumers is one of attitude. As we drop our assumptions and learn to better understand the needs of low income consumers, we’ll be able to tap the full measure of opportunities that Dr. Prahalad envisaged.

C.K. Prahalad spoke poignantly about how much the developed world can gain from serving and ultimately raising the living standards of people at the base of the Pyramid. He’s inspired my colleagues and me to see both developing markets and consumers through sharper, more accurate lenses, and we owe him an inestimable debt of gratitude.  He’ll be sorely missed.

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As always I’d appreciate your perspective.

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Want more information about Dr. Prahalad? Here is the Times Of India’s eulogy.

This is an ’07 video clip featuring his discussion of  “the good and not-so-good” news about globalization’s impact on the Bottom of the Pyramid.

This video features an interview with Dr. Prahalad via Thinkers50 which named him “the most influential business thinker in the world” in 2009.  Here is his keynote address to the Acumen Fund Fellows Class of 2009.

I  recommend Dr. Prahalad’s ’08 book, New Age of Innovation, co-written with M. S. Krishnan.

Finally, here are assorted posts on this blog referring to Dr. Prahalad and emerging markets opportunities and issues.

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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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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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You never know with these things when you’re trying something new what can happen. This is all experimental. ~Richard Branson

Over the years, there have been surprisingly few breakthroughs in the airline customer experience - until recently. Sir Richard Branson’s venture into the U.S. market, Virgin America, (VX) is redefining air travel by providing passengers with a fresh, distinctive on-board experience. The carrier is less than two years old but it’s quickly becoming a template for what’s possible in the future.

The choices VX is making demonstrate a “customer experience mindset” that’s all too rare in the industry. It’s evident that the VX team devoted their attention to passenger comfort and convenience. Features “baked in” to the customer experience include seats with power-outlets and USB ports. Cabins in their new A320s have soft mood lighting.

Healthy, appetizing meals designed by star-chef Luke Mangan show that the company knows what their customers prefer.  Features like these aren’t found on any domestic airline, let alone a low-cost one.

Last week, VX announced that its fleet is 100% WiFi-equipped (Gogo). They only have 28 planes, but they can boast that they’re the world’s first airline to reach that coveted milestone.

What’s most impressive is VX’s touch-screen, interactive entertainment system. The platform, known as Red, enables passengers to watch movies and live TV, play games, chat on-line with other passengers, and sample or even download MP3s from a massive digital library. Passengers can also use Red to order and pay for food and beverages which they receive “on-demand”.  For the digitally-inclined traveler, this is the way to fly.

Given the prohibitive cost of installing systems like Red on their existing fleets, it’s doubtful that any of the major network carriers will soon match VX’s “at-seat” amenities. But, the toughest feature for VX’s rivals to co-opt is its “customer experience mindset”.  These advantages could give the carrier a strong lead in the service innovation race for years to come if it stays healthy during this slowdown.

The airline serves only a handful of markets (New York, Boston, DC and the West Coast).  But, they’re big league markets where VX is attracting a cadre of loyal, well-heeled fans.  As an industry guy, I’m tipping my hat to Sir Richard Branson and VX’s San Francisco-based team for rethinking the in-flight experience, and for executing it well.

What do you think?  Have you sampled Virgin America?  I appreciate your perspective.

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Want more on this subject?

Richard Branson (Reuters, 6-2-09): “It’s unlikely all the big U.S. airlines will survive.”

Read Red Orbit’s piece (10-16-08), “Virgin America Wins Best Domestic Airline in Conde Nast Traveler’s (’08) Readers’ Choice Awards”.

Check out SimpliFlying’s series on Richard Branson and Virgin America.

Related posts:

1. Planning for What’s Next When The Art of the Long View was published twenty...

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While it seems like everything has changed, the axioms of business remain constant. Customers still want exceptional “value” – in fact they’re demanding it. They’re more motivated than ever to look for it. If they can’t get it from you, they’ll go to your rivals. They’ll find value in new, atypical ways to get their needs met.  Help them solve their problems and the market will beat a path to your door.

Delivering exceptional value in lean times requires smarter tools and an atmosphere that encourages collaboration and continuous innovation—always thinking: how can we make this better, cutting out what’s unnecessary.

Winning in this environment isn’t complicated, but it’s not easy either.  There’s no silver bullet— don’t let any consultant or supplier convince you that there is a sophisticated methodology or a killer app that will do the trick. 

Succeeding, more than ever, boils down to empathizing with your customers and figuring out what they want as conditions around them change.  Then deliver it as efficiently as possible while treating them to an experience that’s as pleasing as possible. Of course, that’s easier said than done, but it’s do-able. 

These are certainly interesting times for service providers across industries and regions around the world.  For those with the agility and resources to keep improving their offerings and their customer experiences, new opportunities lie ahead.

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Companies have begunb scrutinizing their value chains from the bottom up and the top down because none of our customers has the extra time or money to be wasted by underperforming partners or suppliers.   The smart  firms have already started this process in earnest. 

Organizations we work with are mustering the self-honesty and diligence to impose greater process discipline and rigor while, at the same time, becoming “turn-on-a-dime” adaptable.  To succeed in this low-demand cycle, businesses will have to focus on what matters most to their customers and relentlessly discard what’s leftover. 

With that in mind, our team this week looked at ways we can improve the quality of services we provide our clients. We convened a workshop in Chicago aimed at squeezing even more value out of our solution delivery model.   We asked ourselves, how can we build more capacity? How can we deliver targeted solutions to clients quickly while also eliminating complexity?  We’re always asking these questions but I can’t recall ever  approaching  them with more ferver and resourcefulness.   

Businesses everywhere are facing one of the most daunting questions of our age. Will institutions be barriers to helping their constituents succeed or will they be bridges to the future?  I think the latter is likely if we take the right approach.  According to our clients and partners, that’s What’s Next…

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Our practice is concerned as much about the human and organizational issues enabling the successful application of business intelligence and analytics. These include management vision and commitment, organizational alignment, culture, and skills. We’ve learned that buying “yet-another-tool” seems easier than solving these broader challenges, but it’s rarely the answer companies are looking for.

The most successful practitioners of analytics somehow manage to create an environment where decisions across boundaries are made on the basis of evidence that comes from rigorous analytics.  Management at those companies enncourages a “test-and-learn” approach to refine products, services and offers.  So analytics encompasses the tools and practices that produces insights as well as the way the company uses the insights to contour its offerings.  Hope this is helpful. 

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To add some perspective, there is only about one landline per 33 people in Africa and that’s unlikely to change much given the high cost of installing fixed lines in the continent’s vast, remote regions. However, mobile networks are relatively easy to install and maintain.  Thus, mobile phones have become the primary communication channel throughout the sub-Sahara.

The large transnational telecoms, hungry for growth and finding saturation elsewhere, are quickly swooping in to the region hoping to grow their user bases.  Mobile operators are investing millions of dollars in  extending their coverage across the continent.  And as competition grows, they’re pouring millions more in to expand and fortify their networks.

This injection of capital is creating jobs and raising living standards in the region, and this is only the beginning.  It certainly feels like we’re at an inflection point and the socio-economic impact will be enormous.

But the African market poses some vexing challenges to operators. First, they’ll need to help the continent’s large base of very low income consumers to overcome the cost barrier of using mobile services.  Bottom line: these consumers who make under $2 a day need lower cost handsets.

Operators have been working with handset makers to produce units for as little as $15 USD. Refurbished handsets, recycled from other markets, are bringing prices down further.

Low income users are mainly interested in a phone’s basic functions—voice calls and SMS text messages—and little else. For them, battery life – especially in regions with unreliable electricity – is more important than ring tone options.

But, low income users are “leapfrogging” to mobile banking which I’ve mentioned previously.  Mobile phones are now being used in developing cash economies to pay for things or transfer money across distances. The implications of the rise of m-banking and other mobile-based services among low income users is enormous.

Meanwhile, mobile operators must also compete for higher income users. They’re rolling out and bundling higher end products like managed data services, Blackberry, WiMax, 3G and more – all of this while reinforcing their infrastructures and business processes to deliver higher service quality and reliability.

It gets even more interesting.  Most of the people who are gaining access to communications and the Internet via cell phones have no other way to access the web, unlike developed country where cell phones are used mainky for voice with Internet access being an occasional activity.

Reliance on mobile devices for Internet access means that content developers in Africa, like other emerging regions, see mobile devices not as a substitute for their desktop, but as a primary data platform.   We’re already seeing some promising examples of voice-data convergence aimed at this growing market. We may witness the first wide-scale convergence applications coming from Africa and other developing markets.

I’ve worked with some talented, dedicated people in the region’s telecom sector.  The speed with which they’re adaptaing to the market’s growth has been impressive.  They’re making strides in building their management capabilities and business processes to meet rising consumer demands.

It’s an exciting time to be working in this market. I can’t think of a more interesting, fertile business environment today than Africa’s nascent telecom sector.  It’s a veritable hothouse for business innovation on so many levels.

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Klein says, “When I think of air travel, there is a conditioned response that it is going to be bad,” and adds, “We’ve forgotten it is a social occasion. I can’t think of any acknowledgement of that by the airlines today.”

He’s so right.  He’s probably someone the industry should tap to help redesign on-board service programs.  In fact, bringing experts from analogous fields like hospitality is a great place to start when rethinking services.  Successful restauranteurs can also bring a lot of practical insight.  Of course, we’d have to bring designers and artists to the party.

I like the concept of tapping experts from a variety of fields and disciplines outside the industry – along with customers – to come with distinctive alternatives that make the on-board experience more enjoyable.

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According to Eva Ziegler, a senior VP who is driving the transformation, “When the business guy who just did 10 meetings in a day arrives at the hotel, all he can dream of is room service and sleep,” he says. “We want to reset his mind!” She added, “My role is to create unique experiences for the guest that stimulate all five senses.”

How are they doing it? The hotelier set out to create a rich, even suprising experience for the customer from the time he or she arrives.  That includes music, art, and food—even scents that waft through the hotel.  The ambience of the hotel is infused with elements that engender a pleasurable experience.

Ziegler set up the LM100, a rotating group of artists assembled to enhance the service experience.  Her mission has been to “court LM100′s cast of artists – painters, designers, and architects – to transform more than 50 aspects of the hotel.”  The artists have created a range of unique artifacts to enhance the customer’s experience.

Le Meridien is already enjoying impressive results. In February, its 2.4 million on-line bookings were 41% higher than the year before.

Branding consultant Steven Addis observes: “The old-school version of this would have been to put together a committee, redesign the hotel, and that’s it.” He adds, ”Instead, these guys are going to be perpetually curating on behalf of — not marketing at — its audience.”

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VA’s success stems from their attitude that the customer is at the center of their universe.  They relied on service design – the art and science of devising an environment that enables the customer to enjoy a rich, satisfying experience.  Unfortunately, it’s an approach that has been largely ignored by the industry.

Design-minded managers relentlessly ask: Who is the person we’re serving, and how can we make their service experience better?  That thinking encourages listening intently to what the customer says along with what isn’t said, but is felt.

Design-mindedness is uncommon in a traditional, operations-centric industry where running an efficient operation is prized above all other endeavors.  That mindset inhibits innovativeness, and too often, the customer is left out of the equation.

As a result, commercial air travel, with some notable exceptions, is perceived as a commodity, i.e. competitors’ services are virtually indistinguishable from each other, and customers tend to buy on price or schedule-convenience alone.

Historically, the major airlines have viewed their central challenge as getting passengers from point A to B as safely and efficiently as possible.  Their organizing principles arise from a linear manufacturing model which hasn’t changed much over time.

The University of Toronto’s Roger Martin observes, “The dominant attitude in traditional firms is to see constraints as the enemy and budgets as the driver of decisions… The traditionalist belief is, “We can only do what we have the budget to do.”

By contrast, design thinkers view their central challenge as solving ”unsolvable” problems. Design-thinkers venerate the customer, and relentlessly seek novel novel ways of overcoming constraints.

VA’s corporate culture – clearly influenced by Richard Branson’s intense creativity and drive – is customer-driven, encouraging design-inspired choices.  Branson’s mission for the Virgin group is to make flying fun again.

Recognizing that they’d have to look outside the industry – to Silicon Valley – VA hired software engineers rather than airline vendors. The mix of engineers and process owners led to some interesting choices.

For one thing, they came up with the novel idea of using an open-source (Linux) platform, named Red, to power a range of nifty features, like touch-screen food and beverage ordering, on-demand media on a high-resultion monitor, and even in-seat chat. Internet connectivity will be available soon. Moreover, Red affords VA the flexibility to support future low, cost innovation.

There are bugs to be worked out. Customers have reported re-boots and other glitches. But, I think VA is well ahead of the innovation curve, and their service platform gives them a clear competitive edge.

How will the industry respond?  Carriers are taking a beating from record fuel prices and reduced demand, and in this cycle, the carriers will be treading water for some time. Under the circumstances, will the U.S. airlines open the door to design-minded, customer-centric thinking? What’s next is anybody’s guess.

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