Customer Experience Focused Company? Focus on Design

I was just reading Ben Thompson's latest member post regarding Cyanogen in India.  On a side note, if you don't subscribe to the daily update, it is worth every penny, great insights.  Anyway, he mentions how Cyanogen is focused on engineering around Android so they don't have to be reliant on Google.  Thompson then went on to say the engineering solution is not focused on the customer experience, so it will have a hard time competing in the consumer market.

This got me thinking about the different kinds of companies there are and to dominate in the consumer space, what should a company be driven by to succeed.  I'm sure I'm missing different types of companies, so feel free to let me know if I missed any, but there are a few different types of companies that come to mind:

• Engineering driven companies
• Sales driven companies
• Marketing driven companies
• Financial driven companies
• Design driven companies

I contend the design driven company is the only company that can truly have long-term success in the consumer market.  The design driven company can beat low-cost competitors and drive sustainable profits.  This is the Apple story.

Engineering Driven Companies

These companies are engineer focused.  They look at the world through all the cool stuff they can build, whether it be technology or buildings, the engineer rules the roost in this company.  The problem with the engineering focused companies is they forget the customer experience and focus on the technology.  The need to create something cool outweighs the need to solve a problem.  Samsung fell into this trap with the Galaxy's, especially 4 and 5.  

By not first looking at the customer experience and then trying to solve the customers problems, a company will create cool technology and then try to fit a customer experience around the cool technology.  This will not have sustainability in the consumer space.  The mass consumer will be confused by the technology and get frustrated with the experience.  Eventually that consumer will choose to churn and choose another product that focuses more on their experiences rather than cool technology.

Sales Driven Companies

These companies are focused on making the next sale.  They look at the world through the need to solve the next customers problem, not the customer experience.  A sales driven organization tends to try to be everything to everyone, and we all know how that story ends.  The need to sell the most and constantly focusing on acquisition drives companies to lose focus on retaining customers.  Microsoft was led by a salesperson for many years and while they had success for many of those, they were disrupted many times over.    

By focusing on selling the most of something, the customer experience becomes muddled.  To serve many masters, a company must focus on creating many different experiences at many different price points for the customer.  This creates no expertise in one area and allows for disruption to come from all angles.  Focus is the key to customer experience and the sales driven company has a hard time selling when everyone is not their customer.  When the focus is on the customer experience, a company can acquire and retain at the same time

Marketing Driven Companies

These companies are focused on making the company well known.  They look at the world through their message.  They focus their time to try and get someone to buy a product or position themselves in the minds of the consumer through advertising and social media.  The infatuation with their own creativity and messaging tends to put the focus on the company, not on the customer experience.

By focusing on branding and messaging, the customer experience becomes secondary.  The metrics of this company is awareness and likes, instead of on customer satisfaction and experience.  The marketing company believes they can convince anyone to buy and the power of the brand will hide all sins.  Customers in the long run will not be loyal to the brand if the experience is not up to par.  They may want to stay with the brand, but they will churn for the fact that being cool and hip is not satisfying their ultimate need for the best experience.

Financial Driven Companies

These companies focus on making as much money for their shareholders as possible.  They look at the world through profits and cash flows, leaving the customer as a means to an end for those metrics.  The desire to make the most money trumps the customer experience in all cases, unless there is a clear-cut ROI for that experience.  These companies get uncomfortable with words like experience, because it can't necessarily be measured or used to create a proforma.  

By focusing on profits, the customer experience tends to fall off in favor of saving expenses.  This company will question R&D and figure out ways to save money now, while sacrificing the future of the company.  Wall Street may like the short term gains of focusing on profits, but when the customer experience erodes and the customers start to churn 3-5 years down the line, it then becomes a marketing or product issue.  These may be the least sustainable businesses in the long run.

Design Driven Companies

These companies focus on the design of what they are producing.  They look at the world through solving problems.  The desire to take a customer experience and make it better trumps profits and sales.  The belief in a design driven company is that if the customer experience is better than all others, the profits and sales will follow. Design is how it works, not just how it looks.  

I used to think that Apple was a marketing company.  Of course I did, I was a marketer and Steve Jobs would get up on stage and do great keynotes and their advertising was second to none.  They had to be a marketing company.  If they were just a marketing company, then they would have already been disrupted.  The iPhone would not be a dominate player and they would be a niche product company with nice profits.  

The fact Apple is a design company has kept them from being disrupted.  Their products are designed with the customer experience at the forefront.  Being able to pay for something without having to pull out your wallet with the touch of your finger is a simple solution.  That solution is not coming from a space of engineering, it is coming from a space of design.  Apple looked at the problem and designed a solution that was easy for the customer to use and that is why people use Apple Pay, otherwise Google would have already been the owner of the space because they were first.

When a company is design focused they don't have to be first.  These companies want to truly solve customer problems, not be fast to market.  If the design company can't solve a problem, they won't enter that market.  A design company will be long-lasting and survive into the future because they care about the people paying money to use their products and services.  Those products and services are designed for the customers they serve, not to take advantage of a need of the customer, but to truly solve their problems.  That is true design.   

The Slow Decline of Companies

In Seth Godin's latest blog he mentions how company's almost always melt, they rarely explode. It is almost always the short-term thinking of today that causes the crisis of tomorrow. 

Rarely in the moment, when business is down and your customers are no longer engaged can a corporation look back and find the reason. That's because it's multiple little reasons that were made in years past for short-term gains that lost the customers trust. 

Trust in a personal relationship is hard to regain, but trust in a consumer to business relationship is almost impossible to regain. 

The Fate of Apple in the Post-Jobsian Era

Apple has been an innovative company, but was Jobs the only man behind the magic?

Steve Jobs was an amazing innovator, but to say he was the only man behind the innovation is a crazy question.  Where I believe they will miss Steve the most is how dedicated he was to innovation.  Because he was in charge, innovation was the most important thing.  Does Tim Cook believe in innovation above all else?  Time will tell.

Apple has yet to release its latest new, breakthrough product. A careful observer would notice that about every three years Apple Inc. releases an entirely new product. In 1998 it released the iMac, in 2001, the iPod, in 2004 the Mac Mini, the iPhone in 2007, and the iPad in 2010. So 2013 should have been the year the world was to see Apple’s latest gadget.

What???  In 2004 the Mac Mini?  Now this is a stretch.  That's like saying the iPad mini was a breakthrough product.  What was so breakthrough about the Mac Mini?  I think the breakthrough was it was 3 years after the iPod, which made the math work.

I don't know if Apple will have another big breakthrough in a new market, but it wasn't a every 3 year magic as everyone likes to say.  The iPod wasn't the killer breakthrough as much as iTunes was the killer software that made buying music and syncing music very easy.  

Apple CEO Tim Cook might have been great as CFO, but he’s not the one who should lead Apple.

What??? CFO?  What is happening to CNN?  How does a major news outlet get something like this wrong?

Apple launched a “cheaper” iPhone, the iPhone 5c, made of plastic and cheaper quality than the premium iPhone 5s. Apple’s advertising places the iPhone 5c above the 5s, a move which suggests that it cares about the cheaper 5c more than the innovative 5s.

Another giant leap for techkind.  Because Apple is pushing for a higher margin phone to sell to the masses over the more expensive "S" series of phone, this means they are caring more about cheap products?  Not the innovative one?  Who edits this?  If Apple really cared about "cheap" over "innovation" they would have made the iPhone 5c much cheaper than they did and have the "true" low cost iPhone the analysts are all clamoring for.  The fact they built a mid-range phone shows they are interesting in protecting margins and staying away from the costly low-end.

Despite Jobs’ legacy as a great innovator, credit often falls short of the people who truly deserve it. Jony Ive, Apple’s legendary industrial designer, has played a key role throughout the years in designing iMacs, iPods, iPhones, and iPads. Apple Senior Vice President of Marketing Phil Schiller has also played an influential role at the company. Apple still retains many of the individuals who served under Jobs and helped to design some of Apple’s greatest hits. 

One cannot even count the legions of software developers and hardware engineers who have made these products possible. Apple today retains many of those same people who once served under Jobs, a good indication that the company has a strong future.

So Apple is not in trouble?  What is the point of this article?  

Apple also has over $110 Billion -- a number that’s not going anywhere in the next few years (if not increasing). With that much cash, it can easily stay afloat in the market.

Great reporting.  Any simple search would have let CNN know Apple has $147 Billion in cash.  The link baiting from the headline is the only reason this article made the web.  

Apple will be fine in the short run.  Tim Cook is making sure the next product is fully vetted, and why not?  If Apple would have put out a watch or TV this year and it would have turned out like Samsung's great watch debacle Apple would have been panned.  Can you imagine the articles about Tim Cook if that happened?  Dammed if you do, dammed if you don't.

Ideas Are Easy

Companies trying to innovate tend to spend a lot of time generating ideas: Brainstorming sessions. Contests. Jams. This can be a huge waste of resources. In fact, most companies have no trouble generating great ideas. But very few are adept at the other steps in the innovation process: picking the right idea, expressing enthusiasm, and executing. So these post-idea stages are what companies should focus on. If they do, their success rates should improve as a result.

11 Ways Big Companies Undermine Innovation

In centuries past, explorers searched for the legendary city of El Dorado, where everything was made of gold. Today, at large organizations, innovation is the new El Dorado.

This is exactly why Microsoft is struggling with innovating Windows.   

Capturing the Innovation Mindset at Bally Technologies

As a former customer of Bally Technologies I have to say I didn't see any of this.  They remind me of Samsung.  Samsung is a first to copy, instead of a first to market.  They are quicker than their competition to copy what is innovative and do it good.  Where Samsung innovates tend to be on features and technology they just don't know what to do with.  For instance, video that pauses when your eyes stop looking at the screen.  Great piece of engineering, terrible implementation of such a technology.  Works in very few use cases.  

Bally's is Samsung, which isn't bad, just not innovative.  

Why Your Employees Need to Make More Mistakes

...for a new company, a willingness to make mistakes is a strength that management should seek to leverage.

Why? Because mistakes are what happen when you're moving fast. Or, to put it another way, if you want to minimize mistakes, you will also have to slow down. If you're too consumed with preventing mistakes, you'll sacrifice speed. In today's competitive landscape, this is not an acceptable tradeoff for a young company, for which speed is one of the few natural advantages over larger, more powerful incumbents.

Couldn't agree more.  In my line of work, CRM/Database Marketing, innovating and acting quickly is much more important than worrying about mistakes.  I always tell my team if we aren't making mistakes, we are moving too slow.  This is why we were able to integrate a Marketing Automation system, new data warehouse design and a new BI platform within 4 months and with a team that is only 5 deep.   

The Myth of Steve Jobs Constant Breakthroughs

For every great leap forward Apple ever made, it accomplished at least as much through small steps that made its products easier, faster, thinner, lighter, more polished and/or more useful. Apple’s most important products may have been the game-changers, but its best products, always, have been those that benefited from smart, evolutionary improvements. And as far as I remember, Jobs never seemed guilty about the profits they brought.

Super article.  Why does everyone want to put a fork into Apple and call them done?  The product they put out on Friday is so superior to every smart phone out there.  Incremental or not, they are still innovating.  

The items in our new iPhone 5s' are the foundation for their next jumps.  The M7 processor is the beta test for a wearable technology.  The 64-bit A7 chip is the baseline to take over TV and move the low end laptop computer world into the modern era.  

Remember, the time between the iPod and the iPhone was 6 years.  The iPod led the way to develop the iPhone.  Without the iPod, there probably never would have been an iPhone.  You can argue the iPad was an incremental improvement on the iPhone.  

So Apple is ready for their next disruption, we just have to realize we are already using it.  When the next disruption comes out, you can bet it has many of the technologies in the current phones.

Apple Innovation from January 2004

Very interesting article from January 2004 and why Apple can't succeed as an innovator.  It's so easy to bash in hindsight.  I think I had the same opinion of the company back then also. 

Innovation...

Companies covered by larger numbers of analysts generate fewer patents, and the patents they produce have lower impact than those from other firms, according to an analysis by Jie (Jack) He of the University of Georgia and Xuan Tian of Indiana University. The findings suggest that analysts exert so much pressure on managers to meet short-term financial goals that they impede companies’ investment in long-term projects, the researchers say.

Hmmm.  Just what I said in my last post. 

Creating Baselines

On Monday Apple introduced a brand new iOS, version 7. While it didn't change the basics of the operating system, it created a new starting point. I call this a baseline. The point in which things will be measured against. The standard if you will.

Baselines are very important to measure your business. I always want to come in to an organization, create a new baseline and innovate from that point. Once innovation has slowed and opportunities start to become scarce, a new baseline must be formed to build the next great iterations. Without the foundation, a house cannot be made.

Apple has created their new foundation on which to build upon. Some don't like it, some love it. In time it will be like second nature and we won't be able to remember when the interface wasn't like this. All companies eventually have to create new baselines, even ones as insanely successful as Apple. This should be embraced, because it takes courage to throw away and start new. The alternative is to slowly fade into mediocrity.

Want to be successful? Be inconsistent

Embrace being inconsistent

My conclusion on the topic of consistency is that it’s not required for success. There is a lot of talk about hard-nosed businessmen needing to be true to their word and never change their mind. I think a better approach is to be open to making adjustments as you learn more. That’s the smarter thing to do. It’s also much more difficult.

Don't be afraid to change your mind.  Be decisive, yet flexible.  Communication is the key when changing views or direction.  If your team knows why the decisions have been changed and what is going on in your mind, they will buy into the change much quicker.  If changes are constantly dictated down without any reason for the change, teams will get frustrated and feel like they are constantly spinning their wheels.  

David Allmark: What do you tell a team that has failed? | 30 Second MBA

I have always believed you don't celebrate the victories and punish the failures.  It leads to everyone focusing on the outcomes, instead of taking calculated risks and innovating.  When failure is punished, teams tend to lean towards conservative programs that are sure fire, but minimal growth.  This leads to a stagnate team that doesn't drive large incremental value.

The Secret Phrase Top Innovators Use - Warren Berger - Harvard Business Review

Very interesting article how a single word can change the way people behave.​

CES Thoughts

In reading all the articles and great new products at the Consumer Electronics Show this week in Las Vegas, something struck me as interesting.  These companies have very extensive organizations and huge resources in R&D, yet nothing seems to be truly innovative.  Why is that?

I used to work in a technology company for the gaming industry, technology was even in their name.  Seems a majority of these companies are engineering and sales focused, this particular company sure was.  Now I am not saying that as a slight to engineers, it is just that engineers tend to be, well, engineers.

Engineers build cool stuff.  They believe most people think like them, but the truth is most people don't think like an engineer.  Consumers want technology that is intuitive and they want to be guided through user interfaces and hardware.  Engineers want complex and open.  

The products that I saw at CES were all in response to competition.  It seems like a "we need that too" mentality that puts these companies in a catch-up position.  Why is everyone after Apple?  Why is Apple so successful?

Apple is so successful because they put themselves into the shoes of the consumer.  Steve Jobs is obsessed with UI and customer interactivity.  How ill a consumer use this device, what buttons will they hit, how would a normal everyday Joe think when presented with a particular screen.  Engineers don't do that.  Engineers are obsessed with creating something technologically amazing.  The problem is most of the time it makes it very hard for the consumer to use it.  Apple takes that great thought and says, how can we make this easy for 98% of the people and use cases.  Sure, the 2% think it is terrible, but the 2% doesn't pay the bills.