April, 2008 – "Recession-proof" your business through customer-centered design: their experience IS your business

Jay More: Hello everyone, my name is Jay More, President at Human Factors International. Welcome to this live broadcast presented today by HFI's Usability Broadcast Network. The title of today's webcast is "Recession-proof your business through customer-centered design: Their experience is your design." Now I'd like to introduce Kath Straub, HFI's Chief Scientist. Let me begin by just a few reminders. First, feel free to request the white paper with the link at the top of the screen and the white paper will be out in a few weeks and you are welcome to download that when it's available. Two, you can review our complete schedule of webcasts, the 2008 schedule, on the HFI website and three, feel free to submit your questions during the broadcast in the link at the lower-right and we will be glad to answer as many questions as we can in the hour. So without any further ado, let's – shall we start?

Kath Straub: Let's get started.

Jay More: The topic is recession-proofing your business through customer-centered design and I want to let you all know that in researching this topic, we found that there was almost no information in the literature or on the web relating to the field of user experiences that's applied to the field of getting through the recession. We were kind of astonished since we know that everybody says you know, you must spend more on your customers and yet there is nothing to guide anyone through that so we thought we have some ideas. Kath has put together some ideas – some interesting ideas, we have some ideas we think you will find valuable but we know that you guys all have ideas as well and you are working through this economy just as everybody else is so feel free to send us your ideas on how to get through recession by applying user experience and we would like to collate those, organize the best ideas and put them together in the final white paper so everybody can share not only ideas we have but all of your ideas as well.

Kath Straub: Right.

Jay More: And I'd like to turn it over to Kath.

Kath Straub: Well, actually I think I want to say also the reason you and I are doing this together is that we give both the technical side and the business perspective on what happens in a recession as well, right? So you'll be contributing as well on the ideas around how business can be made recession-proof or tightened or more aligned in a way. So our objective today is to really talk about or demonstrate as I said is on amplifying UCD efforts in order to strengthen your organization's position as an organization with – as a group within an organization but also as an organization within a recessionary period. So just to start out with some examples of statistics of some of the issues that we see and this is referring to some literature from a book called "Connecting the Dots". About 40% of IT investments fail to deliver their intended return, that's sort of a major problem for a big business, yeah?

Jay More: It shows that there is a lot of inefficiency.

Kath Straub: And 80% of IT projects have a fragmented funding and ownership structure so that suggests that there are lots of people doing lots of good work but no coordination amongst them so they're re-inventing the wheel quite a bit within the organization and worst of all and probably I can use the other two bits, 90% of companies have no portfolio management strategy for their IT projects.

Jay More: And if you add to that, another interesting statistic, on average U.S. companies own a lot by acquisitions and in fact, just roughly, there are about 11,000 corporate acquisitions per year. So you can imagine that if there is inefficiency in the IT world in managing projects that IT already has, imagine now adding all the thousands of acquisitions that then contribute to the complexity.

Kath Straub: So having a higher level strategy that envelops the strategies of the acquisitions is going to be important as well.

Jay More: In fact that's the theme that will run through this whole webcast – is to take a higher level view.

Kath Straub: And so we would just want to quickly look at the economic cycle and talk about what happens at these various points in the cycle. So we're really focused on what happens in the downturn and the swing as you swing back up and how we can use user experience to make an organization's position stronger. So some of the things that we were talking about as we prepared for the webcast is that some of the responses you have to make in the space are fairly counter-intuitive.

Jay More: That's absolutely right. In fact, there will be a tendency as you're thinking of recession to say as a response to your own management's apprehensions to control budgets, to be careful, to cut back, to spend less – your focus will begin to start narrowing and here's the paradox. This is the time that you need to of course prioritize right, we all know that budgets are getting more limited and that we have to think smarter but then you also have to hold the thought that - wait a minute, we know the average recession isn't that long especially in the last twenty years and in fact since 1854, if you average all of the recessions, they are only about seventeen months long and even in recent history in the last ten to twenty years, they are even shorter than that. So here's the paradox, you're being asked to control budgets and narrow your vision of focus and then you know that the recession isn't potentially going to last that long and yet many of your projects in user experience span longer than the recession. So the challenge is to hold two opposites at the same time, to prioritize what you are doing and to be sensitive to what your management is saying but at the same time don't lose sight of the overall goals for your projects and your larger projects because if you do, you will then spiral in the direction that you don't want. So it's keeping two opposites, a long-term vision of the project that you have and simultaneously prioritizing.

Kath Straub: But how am I going to do that? I have a small project that I have to keep going. I have a budget that you want me to reduce by 20% as my president because we are cutting across the board. How am I supposed to do both of those things at once?

Jay More: You have to do that by prioritizing. You have to say that this is important now but this will be important two years from now. We have to already anticipate that the recession will already be over. So you have to take aspects of both and in fact I have been reading an interesting book and I am not sure if you can see it but it's called "The Opposable Mind" and it's by Roger Martin and he's got an interesting point. He says that conventional thinking says that we look at the pros and we look at the cons and whether we pick one solution or the other. His view is that we must have integrated thinking. So how do we apply that to this example? One has to be able to simultaneously prioritize and simultaneously think of the larger scale projects that one is doing and then integrate them. So take aspects of both. You can't lose the long-term but you can't overspend. You can't just focus on the short term either. So that's the answer.

Kath Straub: But I have certain projects that I need to work on. It sounds like you want me to think about the projects that are going on besides my project.

Jay More: That's right. You have to be sensitive to a wider angle lens – this is wider angle lens thinking. This isn't the time to just focus on what you're doing in your department. It is to really understand how your corporation is viewing their priorities and then how they're really working to really satisfy customers now and understand their needs. It is time to interact with the strategy of the company, to really keep that in mind and not just think of doing one's work in a narrow way. Let's interact with Marketing, interact with Customer Service, interact with Operations and align what you are doing, even if it may be scaled down somewhat to the bigger picture.

Kath Straub: I see. Okay so let's talk about that in the broader sense. During recession, we have been talking about the fact that organizations need to think holistically both at the higher level strategically but also even at the space of individual projects. So I as the project owner who may be working on a single interface should also probably be aware of what other silos are doing that might be similar to or might have patterns that are similar to what I am working on so that we can share resources, so that we cannot not re-invent the wheel at separate channels or separate silos, is that what you mean?

Jay More: That's really a huge point. In fact we really have to think of our skills in the broader sense as well, we have to really focus on leadership. We have to become leaders to guide our companies through the recession. I want to read a quote. This is a quote by a gentleman named Studer who has written a book on leadership. This is a great quote. "There's a very big positive that comes out of downturns", says Studer. "It sharpens our survival instincts and shows us what we are really made of. Instead of just coasting along on our way of economic boom, we are forced to get focused and serious and for many companies, the pressing need to turn it up a notch kick starts a journey of transformation." And I thought that that was a really good quote because if you look at the diagram, we have got the peaks and troughs-the peak and we have got the bottom. At the top, when money is plentiful and a bull market, then one doesn't really need to narrow one's focus. One doesn't need to prioritize as much and really, if one looks at a potential recession as a chance to grow and transform, it's really a journey of leadership. It's really a chance, it's a chance to grow and the growth comes from thinking in a wider-angle lens not just to focus on narrow perspectives but to think clear.

Kath Straub: Okay. But there's still, so we have these opposing things that we are thinking holistically but we are prioritizing spending. We are careful about what we are doing within this space.

Jay More: Correct.

Kath Straub: Because the strategy can be a problem. Okay, well one of the things that we have seen very consistently in the literature in the last six months is that usability experience and user engagement are becoming part of the four or five most strategic organizations. So either through the more comfortable periods even now the recessionary period most organizations are saying very clearly and are sending a very clear message that consumer experience is part of their high-priority list for the next year. So what we are looking at now is a Forrester report suggesting that in fact improving online usability and I am going to highlight a few of them. Improving online usability, making online interactions more enjoyable – so that's not usability any more, that's more about user experience and also thinking about things like deploying mobile web applications. So having user experience across channels will become high priority initiatives for organizations even though these organizations were being surveyed through a period that they could see perhaps, an economic downturn coming. So organizations, top organizations realize that this has become a critical part of engaging their customers more broadly to become loyalists or advocates and building the brand in an environment where there is competition to be had because where you have the competition is – where you have the competition is where you most have the best customer satisfaction or the best customer experience, right?

Jay More: Absolutely.

Kath Straub: Okay. So well, the question that is apropos to the topic that we are to talk about is what does UX have to do with this? What does user experience and user centered design contribute to these priorities that you set out a little earlier. In terms of thinking holistically, what can user experience people do to bring a benefit to an organization from a business perspective?

Jay More: Well, what users can do to bring benefit to from a business perspective is again, to think broadly, to understand what the companies ROI goals are and what their vision is.

Kath Straub: Okay, so in a sense what we are doing from our perspective as the group who is trying to work on interfaces and engagement is to think of how we can align those experiences across perhaps different channels. To align those experiences against the competitor's, I mean we know what we are doing and we know what they are doing. We can differentiate ourselves in a meaningful way. So we have a consistent message throughout the organization.

Jay More: And from a business point of view, I think you've hit the nail on the head. It's differentiation.

Kath Straub: Okay.

Jay More: We want to be able to differentiate more strongly during a recession. During the last recession, Wal-Mart was able to keep its brand footprint very strongly among its differentiators because everything they did carried through, everything they did.

Kath Straub: Okay so that ties really well into the next point which is to prioritize spending so the way that user centered designers can contribute to or what user centered research can contribute to the organization in terms of prioritization of spending is helping organizations recognize what they need to do to evolve efficiently. So helping them know what is the differentiator? What is the thing that helps consumers make a decision to pick you versus pick someone else? How are they interacting with you in your environment or how are they interacting with you along with other customers to increase your differentiation in that space? So, where does the money go to establish that differentiator, right? Okay, and then continuously improving. That is what we would be doing all the time, no?

Jay More: Well, I think that it's more important now. It's more important than ever that we lock in the gains that we have been achieving with the work we have been doing. It's a chance to say, "Well look, we need to do our studies but we need to measure what we've done so that we can repeat what works." And what works and perhaps to emphasize what isn't working but we can't find that out if we don't measure it.

Kath Straub: Okay, so let's talk about how that maps directly to user centered design methods. So we talked a little bit about alignment, evolution and measuring and these are the – in more general terms, these are the general ways that we think about the kinds of things that a user centered design group can really do so benchmarking where the organization is now with respect to their interfaces, doing consumer research that leads forward, doing the design obviously, validating that design and then institutionalizing which is to say bring that user experience effort across the entire organization in a coordinated manner. Okay, so in terms of – in terms of amplifying some of these efforts, one of the things that we want to talk about then is - what are the areas of research? So what you said a little bit earlier, better understanding our customers, right and again, this is a bit counter-intuitive perhaps, right?

Jay More: It is counter-intuitive and in fact I'd ask Kath, could we look at the UCD and could we really zero in on what to emphasize the most during a recession? Again, there is not much valuable literature on that. Perhaps Kath has done that. Research itself is important because that would the place it is most counter-intuitive. The logic would say well, we need to save money so let's cut on research.

Kath Straub: Research and design, yeah.

Jay More: But the counter-intuitive point is if we need to understand our customers better, we need to dig deeper. We need to understand what salience is with our customers and so we need to do more research, deeper research.

Kath Straub: And this is something we've heard from CEOs and the leadership of some major organizations too as well. Alright, so you have some quotes that you might want to bring up there. I know I was at a conference a few weeks ago where one of the leaderships at a Fortune 50 organizations said that in fact, during times of recession, they double down on their research, they don't cut the research back because the goal of doing that is to position themselves not only to withstand the storm during the recession but also be positioned better in the future by having that differentiator that makes the customers hang on to them during the recession, be loyal and have a relationship built and stable over time and as the recession dips down and goes away.

Jay More: And we, the quote I'd like to mention is in fact, this was in Business Week this week and it relates to the point that yes, we can do research but we don't need to necessarily spend a lot of money on it and let's take the example of Amazon with the CEO, let's see what Jeff Bezos said. This is a question to him from Business Week. "The company has a reputation for frugality, is that applied to the way you innovate?" Remember we are innovating through a more difficult period right now.

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