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Making Business Human:
Delivering Great Experiences in a Connected Age
#ias12




Peter Merholz
e: peterme@inflection.com, peterme@peterme.com
t: @peterme
WARNING:
There will be very little actionable wisdom.




                                               2
Awareness of user experience
is at an all-time high




                               3
Apple’s has the largest market cap of any company.


Simply Hired lists 4,500 jobs in the United States with
“user experience” in it’s description.


UX conferences set new attendance records every year.


“It’s a magical time to be doing what we’re doing”



                                                          4
362 firms

                  95% say they are
                  “customer focused”

                  80% say they deliver a
                  “superior experience”




                  How many of these
                  firms’ customers agree
                  that they deliver a
                  superior experience?




                  8%
from “Closing the Delivery Gap” by Bain & Company
Forrester’s 2012 Customer Experience Index




                                             6
Why are so many user experiences so bad?




                                           7
The technology is more immediate, accessible,
distributed.


Experience design processes and methods are mature.


We’re investing in these practices like never before.


But...



                                                        8
Do you work in a company with an org chart?

Where you have a clear, hierarchical reporting structure?

Do job titles determine work responsibilities and salary?

Are there policies, procedures, and rules for you to follow?

Do people work in cubicles, visually isolated from colleagues?

Are meetings primarily about the status of various initiatives?

When engaging consultants, do you issue an RFP, and require a list
of deliverables that will be delivered within a certain specified time?




                                                                          9
If you answered “yes” to those questions,
then you work in a bureaucracy




                                            10
Many assume bureaucracies are just how
work is done.
But they were created for a purpose.




                                         11
12
13
http://www.flickr.com/photos/mwichary/2356663850/   14
15
The “iron cage” of bureaucracy




                                 16
Industrial/Information age   Connected age
Products                     Services
Manufacturing                Customer experience
Ownership                    Access
Stocks                       Flows
Efficiency                   Effectiveness
Analytical                   Generative
Silos                        Cross-functional

Hierarchical                 Hyperlinked

Algorithmic                  Heuristic

External rewards             Intrinsic motivation

Individual                   Social

Isolation                    Relationships


                                                    17
What are relationships based on?




                                   18
Image Frame
2011 Temkin
Trust Ratings




2012 Temkin
Experience
Ratings
“Colleen [Barrett] is primarily responsible for the
humanistic culture that we have at Southwest
today...One of the really significant things she did was
give our people on the front line a lot of flexibility.
Basically, she ascertained that we could not anticipate
every situation that would evolve in a given station at a
passenger terminal. Therefore, she told our employees—
and meant it—that
as long as you are leaning toward the customer, you
are OK... They did not need to ask permission from
anybody to do so.”
Herb Kelleher, founder of Southwest Airlines
If you trust your employees, your
customers are more likely to trust you




                                         22
March 2011 on kottke.org...




                              23
24
How might we widen the circle of trust?




                                          25
Image Frame
Image Frame
Image Frame
Image Frame
30
CUSTOMERS
                  Lose       Win
           Win

                           YAY!
BUSINESS

           Lose
32
33
34
Management




         Trust

Staff                Customers




                                 35
A cautionary tale...




                       36
Reed Hasting’s “Culture” Presentation




                                        37
38
From the Netflix Blog

“...we have realized that there is still a very large
continuing demand for DVDs both from our existing
members as well as non-members. Given the long life we
think DVDs by mail will have, treating DVDs as a $2 add
on to our unlimited streaming plan neither makes great
financial sense nor satisfies people who just want DVDs.
Creating an unlimited DVDs by mail plan (no streaming)
at our lowest price ever, $7.99, does make sense and will
ensure a long life for our DVDs by mail offering...”


                                                            39
Netflix forgot that most people are not like
the people who work at Netflix.




                                               40
Netflix also hadn’t realized that any
relationship, even a business relationship
with customers, is an emotional one.




                                             41
42
Foresee Holiday 2011 Retail Satisfaction
The value of
 empathy
 (roughly $10 billion)




                         44
What’s with all this talk about
“design thinking”?
Well, everything I ever needed to know
about managing experiences...




                                         45
The Marshmallow Challenge




http://marshmallowchallenge.com/


                                   46
http://www.flickr.com/photos/copleys/1842011981/   47
Express visually and tactilely




http://http://www.flickr.com/photos/copleys/1842854394/
                                                          48
All contributors are equal




http://www.flickr.com/photos/wwworks/2885861465/   49
Kinesthetic engagement




http://www.youtube.com/watch?v=_jK-jC2__Fw

                                             50
51
side note: don’t let Facilities get in your way




                                                  52
The Connected Age requires business to
embrace what makes us human.




                                         53
complexification   X   connectedness



   = Chaos and unpredictability


                                       54
Industrial/Information age   Connected age
Products                     Services
Manufacturing                Customer experience
Ownership                    Access
Stocks                       Flows
Efficiency                   Effectiveness           this
Analytical                   Intuitive              stuff
Silos                        Cross-functional         is
Hierarchical                 Hyperlinked            messy!
Algorithmic                  Heuristic

External rewards             Intrinsic motivation

Individual                   Social

Isolation                    Relationships


                                                         55
Great member experiences fuse left and right brain approaches
                                   We need...
          Left brain               Right brain
            Analytic               Emotional
           Rigorous                Visionary
         Bottom-up                 Top-down
         Engineered                Creative
          Evaluative               Generative
        Quantitative               Qualitative

      And this is
     insufficient                                               56
57
My favorite passage from Steve Jobs

Jobs did not organize Apple into semiautonomous
divisions; he closely controlled all his teams and pushed
them to work as one cohesive and flexible company,
with one profit-and-loss bottom line. “We don’t have
‘divisions’ with their own P&L,” said Tim Cook. “We
run one P&L for the company.”




                                                            58
59
Just one more story...




                         60
61
Instead of the penetration of the organizational
systems into the body...we see precisely the reverse,
the extension of messy, open-ended techniques of
clothing, layering, and stitching from real fabric
into organizational fabric as well.

                                                        62
More playful           More emotional

More social               More respectful               More emotional


  How can you make your organizations more human?

                More creative         More interdependent
More physical                                            More sensorial
                           More trusting




                                                                          63
More playful           More emotional

More social               More respectful               More emotional


  How can you make your organizations more human?

                More creative         More interdependent
More physical                                            More sensorial
                           More trusting



  Thank you.
                                                                          64

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Making Business Human: Delivering Great Experiences in a Connected Age

  • 1. Making Business Human: Delivering Great Experiences in a Connected Age #ias12 Peter Merholz e: peterme@inflection.com, peterme@peterme.com t: @peterme
  • 2. WARNING: There will be very little actionable wisdom. 2
  • 3. Awareness of user experience is at an all-time high 3
  • 4. Apple’s has the largest market cap of any company. Simply Hired lists 4,500 jobs in the United States with “user experience” in it’s description. UX conferences set new attendance records every year. “It’s a magical time to be doing what we’re doing” 4
  • 5. 362 firms 95% say they are “customer focused” 80% say they deliver a “superior experience” How many of these firms’ customers agree that they deliver a superior experience? 8% from “Closing the Delivery Gap” by Bain & Company
  • 6. Forrester’s 2012 Customer Experience Index 6
  • 7. Why are so many user experiences so bad? 7
  • 8. The technology is more immediate, accessible, distributed. Experience design processes and methods are mature. We’re investing in these practices like never before. But... 8
  • 9. Do you work in a company with an org chart? Where you have a clear, hierarchical reporting structure? Do job titles determine work responsibilities and salary? Are there policies, procedures, and rules for you to follow? Do people work in cubicles, visually isolated from colleagues? Are meetings primarily about the status of various initiatives? When engaging consultants, do you issue an RFP, and require a list of deliverables that will be delivered within a certain specified time? 9
  • 10. If you answered “yes” to those questions, then you work in a bureaucracy 10
  • 11. Many assume bureaucracies are just how work is done. But they were created for a purpose. 11
  • 12. 12
  • 13. 13
  • 15. 15
  • 16. The “iron cage” of bureaucracy 16
  • 17. Industrial/Information age Connected age Products Services Manufacturing Customer experience Ownership Access Stocks Flows Efficiency Effectiveness Analytical Generative Silos Cross-functional Hierarchical Hyperlinked Algorithmic Heuristic External rewards Intrinsic motivation Individual Social Isolation Relationships 17
  • 18. What are relationships based on? 18
  • 20. 2011 Temkin Trust Ratings 2012 Temkin Experience Ratings
  • 21. “Colleen [Barrett] is primarily responsible for the humanistic culture that we have at Southwest today...One of the really significant things she did was give our people on the front line a lot of flexibility. Basically, she ascertained that we could not anticipate every situation that would evolve in a given station at a passenger terminal. Therefore, she told our employees— and meant it—that as long as you are leaning toward the customer, you are OK... They did not need to ask permission from anybody to do so.” Herb Kelleher, founder of Southwest Airlines
  • 22. If you trust your employees, your customers are more likely to trust you 22
  • 23. March 2011 on kottke.org... 23
  • 24. 24
  • 25. How might we widen the circle of trust? 25
  • 30. 30
  • 31. CUSTOMERS Lose Win Win YAY! BUSINESS Lose
  • 32. 32
  • 33. 33
  • 34. 34
  • 35. Management Trust Staff Customers 35
  • 38. 38
  • 39. From the Netflix Blog “...we have realized that there is still a very large continuing demand for DVDs both from our existing members as well as non-members. Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs. Creating an unlimited DVDs by mail plan (no streaming) at our lowest price ever, $7.99, does make sense and will ensure a long life for our DVDs by mail offering...” 39
  • 40. Netflix forgot that most people are not like the people who work at Netflix. 40
  • 41. Netflix also hadn’t realized that any relationship, even a business relationship with customers, is an emotional one. 41
  • 42. 42
  • 43. Foresee Holiday 2011 Retail Satisfaction
  • 44. The value of empathy (roughly $10 billion) 44
  • 45. What’s with all this talk about “design thinking”? Well, everything I ever needed to know about managing experiences... 45
  • 48. Express visually and tactilely http://http://www.flickr.com/photos/copleys/1842854394/ 48
  • 49. All contributors are equal http://www.flickr.com/photos/wwworks/2885861465/ 49
  • 51. 51
  • 52. side note: don’t let Facilities get in your way 52
  • 53. The Connected Age requires business to embrace what makes us human. 53
  • 54. complexification X connectedness = Chaos and unpredictability 54
  • 55. Industrial/Information age Connected age Products Services Manufacturing Customer experience Ownership Access Stocks Flows Efficiency Effectiveness this Analytical Intuitive stuff Silos Cross-functional is Hierarchical Hyperlinked messy! Algorithmic Heuristic External rewards Intrinsic motivation Individual Social Isolation Relationships 55
  • 56. Great member experiences fuse left and right brain approaches We need... Left brain Right brain Analytic Emotional Rigorous Visionary Bottom-up Top-down Engineered Creative Evaluative Generative Quantitative Qualitative And this is insufficient 56
  • 57. 57
  • 58. My favorite passage from Steve Jobs Jobs did not organize Apple into semiautonomous divisions; he closely controlled all his teams and pushed them to work as one cohesive and flexible company, with one profit-and-loss bottom line. “We don’t have ‘divisions’ with their own P&L,” said Tim Cook. “We run one P&L for the company.” 58
  • 59. 59
  • 60. Just one more story... 60
  • 61. 61
  • 62. Instead of the penetration of the organizational systems into the body...we see precisely the reverse, the extension of messy, open-ended techniques of clothing, layering, and stitching from real fabric into organizational fabric as well. 62
  • 63. More playful More emotional More social More respectful More emotional How can you make your organizations more human? More creative More interdependent More physical More sensorial More trusting 63
  • 64. More playful More emotional More social More respectful More emotional How can you make your organizations more human? More creative More interdependent More physical More sensorial More trusting Thank you. 64