by Tom Goodwin
Span software, hardware and services
Generally speaking in the world there are physical companies trying to get digital, and digitally led companies trying to embrace physical. ‘Is Walmart going to get e-commerce before Amazon gets brick and mortar?’ is the classic question, but we see the battle everywhere and it’s a false dichotomy.
The jaw-droppingly expensive and beautiful Devialet speakers sound like they come from heaven, yet the app you use to control them is less impressive. When you buy the speakers you get access to exclusive live broadcast concerts and over their lifetime they update with greater connectivity and better sound quality.
Brands and businesses need to think less of what they make and more about how it feels in all senses. The experience of shopping online now includes the packaging, the bill you get from your utility company may be offset by how easy it is to pay, how much extra would it cost to make a Nespresso machine that auto orders coffee capsules and how much more money would that make? What would happen if a TV maker felt the menu design and the remote control were important to make beautiful, what if they came with exclusive apps? More than anything else we need to think in terms of long-term relationships, how do we keep car buyers coming back to the brand, how can we ensure we go from a Samsung TV, to a Samsung smart home?
By thinking of the physical and virtual, access not ownership, holistic not device, we can increase the power of what we offer and our ability to charge a premium.
Be drastic, not agile
‘Move fast and break things’, ‘Test and learn’, ‘Dynamic optimization’, ‘Fail fast’, we’ve all embraced the thinking of the modern age and this always-on and agile approach. Clearly moving fast is good, clearly bureaucracy is bad, but sometimes I’m not sure we think. Often corporate strategy for large firms seems to be missing. There isn’t a bold vision, progress is an algorithm, we A–B test ourselves to the future. This isn’t inherently bad, but it reduces the chance of bold progress. Most companies today are typically just trying to keep up with the needs of today, they are merely trying to work hard to stay the same distance behind.
If we think of companies as skyscrapers (see Chapter 1), or as a mainline railway line that’s old and crumbling, one reaches a point where it’s better to rebuild than it is to maintain. Software gets bloated and unknown, people get jaded and bitter, organizational charts groan under the weight, hardware becomes out of date.
I wonder sometimes if we need the opposite to agile. We need sudden leaps forward and then periods of stability. We need systems and processes designed in tandem with each other. We need to leap to create brand new entities based on the latest thinking and software, and periods of calm where we change little. It’s a bold new way to think about change, it’s countercultural, but it’s interesting to ponder.
Be optimistic
There are incredible opportunities for companies who get this right. Each and every one of these ways of thinking is positive in nature, but taken together, they can feel overwhelming. Press coverage and general discussions in business today tend to focus on the negative only. We continually focus on the companies that got it wrong or that didn’t change. It’s very difficult for people to feel overly optimistic.
As you walk around the world today, you see signs of this. You see very, very few companies enthusiastically embracing what they could be doing. I would love to see old companies change their approach. The day that computer-aided design entered architecture practices saw the launch of a plethora of new forms, and ideals, and ideas being developed. Frank Gehry or Santiago Calatrava did not have to change in order to stay in business; they did so because they felt incredibly excited to do things that had never been done before.
References
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Bariso, J (2017) This e-mail from Elon Musk to Tesla employees describes what great communication looks like, INC, 30 August, available from: https://www.inc.com/justin-bariso/this-email-from-elon-musk-to-tesla-employees-descr.html [last accessed 7 December 2017]
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Sacks, D (2014) The multimillion dollar quest to brew the perfect cup of coffee, Fast Company, 18 August, available from: https://www.fastcompany.com/3033306/the-multimillion-dollar-quest-to-brew-the-perfect-cup-of-coffee [last accessed 7 December 2017]
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PART THREE
Anticipating the future
08
A changing canvas
People are funny. The top two things most people complain about are ‘the way things are’ and ‘change in the world’. We need to get better at loving what is new, and establishing what to worry about and what to embrace, what to ignore and what to obsess over. This chapter is an attempt to do that.
It’s hard in business and in life right now. What we need more than ever is simplicity, people to spend time joining the dots together, ignoring distractions, plotting a path through change and making the complex easier to understand.
This chapter will describe the clear movements over time that businesses can exploit now. These are demonstrable movements we see today and that we can work from. Unlike Chapters 9 and 10 that follow, this chapter is looking less into the future. It’s not a guess of what could come, it’s the here and now, and it’s often misunderstood. These themes are more about connecting the dots we see today and around the world. These are themes that may appear to be somewhat futuristic in nature, but are merely a snapshot of some of the most contemporary things on this planet at this moment.
Digital disappointment
The greasy fingerprints told only half the tale. Large plasma screens littered the departure lounge, but despite (or possibly because of) their oversized font, the perfect height of the monitors, and the very slow refresh rate of data, affixed to each and every one was a peeling printed label: ‘This is not a touchscreen.’
Digital disappointment surrounds us. Everything should be faster, more accurate, and personalized. Anything new progresses from magical, to wonderful, to expected, to disappointing in a matter of moments.
The only things that consistently move faster than technologica
l advancements are our expectations of them. The lag delays further, the gap between what we expect and what we get grows larger, and delight fades quickly to disappointment. It’s getting worse.
My phone can access everything ever made by anyone anywhere immediately – but why is this taking so long? When I can get 4G on the Shanghai underground, why can’t I get reception in the elevator? Why can’t I stream this abroad? But my other bank uses Touch ID. You don’t have Uber here yet? Why can’t you remember my username? And for all the promise of big data, my credit card provider is still sending monthly sign-up offers by post.
Surrounded by mismanaged expectations, the beat of modern life is disappointment.
Technology for many is something we only notice when it’s not working. Toddlers look aghast that the TV isn’t touch-enabled. Teens are exasperated that angry tweets are not replied to within minutes. And it’s only spreading upward to older people, further away from the bleeding edge. As companies built for the modern age slowly replace their industrial incumbents, we now see each best-in-class experience as the standard for all.
As the process of technological disruption reaches maturity in some industries, it hasn’t even begun in others. We’re now left with the laggards: banks that refuse to see the future and insist on maintaining high-street locations rather than perfecting customer service; insurance companies that refuse to accept the changing world of Zipcar and Airbnb; healthcare systems based on paper; and immigration and tax policies yet to accept that planes and the internet exist or that jobs can be freelanced.
What can companies do about digital disappointment?
Chapter 11 of this book will focus on customer experience in the new world, and will discuss the need for empathy and technology, but for now just take on this realization that companies need to get better at understanding life from a customer’s perspective. Companies think that customers compare the booking flow of their mobile operator with that of other mobile operators, when they actually compare it with any form they have ever typed information into.
Companies need to look around and further afield
Every company needs to consider the competitor and comparison set of every single experience a customer may have, not just those in their category. Experience isn’t limited by anything. Luxury retailers look at other luxury retailers, but never further afield. Banks benchmark against other banks. Airlines do the same. We need to get better at considering every single amazing experience we have as stimulus for ideation. If a hotel in Dubai googles you and establishes it’s your birthday, why can’t your airline? If you can buy things in one click on Amazon, why not on a banking website? We need to look at best-in-class solutions from anywhere. These best-in-class solutions are likely to be found around the world in a variety of places. Often we can learn the most by looking at luxury brands, or companies in Asia, but especially by looking at new companies who’ve employed the best and latest technology.
Business must do the basics well first
Chains are as strong as their weakest link. Companies need to get much better at shoring up the worst part of the experience, doing all basic things right, before having a strong platform to perform the extravagant extras. It is hard because you don’t get famous this way. The fact that Verizon always works for me, that Chase’s website is never down, that Delta Air Lines’ staff are always just lovely, that Quartz is just a beautiful, well-designed news site with great articles is rarely celebrated. But that doesn’t mean I don’t notice their competitors that fail.
Time limited, stuff abundant
Growing up in a small Cotswold village in the middle of England in the 1980s, I remember boredom. When the TV station Channel 5 launched in the UK, we were propelled into a future with 25 per cent more stuff to do; the maths was that easy. Even with five TV channels, my Dad’s trusty VHS recorder, and access to the village shop video rental library, I remember being bored. I remember watching snooker or lawn bowls on TV, or the Antiques Roadshow. I remember listening to the chart show on the radio, fingers poised over ‘record’ and ‘play’ buttons, patiently and avidly waiting for the songs I liked to come on to be recorded. A lot of my youth was about being both bored and focused, paying full attention to things I didn’t really like, I guess making the most of scarcity.
It dawns on me now that I’ve not been bored since about 2004. Our primary challenge today is operating in an environment where we cram 31 hours and 28 minutes of activity into every 24-hour day. To do this we multitask, we shop as we check our phones, have the radio on while we cook, we have tablets on laps, phones in hand, TV on in the background. An abundance of stuff is now created, social posts, photos from friends, more scripted TV shows than ever before. More movies, more songs, more websites, more of everything. We have far too much stuff, and far too little time.
Often trends appear to work like Newtonian physics: for every action there is an equal and opposite reaction. It’s the uniform reliability of a Bud Light that makes the craft beer movement make sense, it’s the boring but comfy assurance of Holiday Inn Expresses that make the ‘will-they-really-be-there-when-I-get-there?’ fun of Airbnb work. Consumerism is the same. Those who grew up under communism and pretend-equality now seek a way to express themselves and their status with an enduring love of luxury brands. It is the bland sameness of brutalist apartments in Bucharest that mean a thriving culture of interior design and some of the most eye-bleedingly expensive interior design stores I’ve ever seen.
It is this same dynamic that explains a shift away from stuff in most of the Western world. Those 30-year-olds growing up today in the developed world probably had a childhood of rampant consumerism and more than enough stuff. If you got the TV you wanted when you were 15, got clothing for bargain prices at 16, then you’ve never really known scarcity. But then suddenly you don’t love the idea of stuff.
It is now clear in this era that our big problem in life isn’t scarcity; it’s abundance, and in every way. We have too many careers we could have had, too many cities we could have lived in, too many people we could have married, too many restaurants we could have eaten at. And when you understand this, you are better able to forge a company fit for these people.
Steps to work in the age of abundance
Three things are apparent from this shift to a world of too much stuff and too little time.
1. Make it easier for people to buy your products
Everything you sell should be as simple as possible. Casper offers one mattress, Allbirds one type of shoe. We have long worked on the idea of the ‘long tail’, that someone will buy everything one day. Increasingly we either need to offer a very small number of items for sale, or use personalization software to appear that way, to be unique for everyone. And let’s shorten the purchase funnel, let’s make advertising shoppable. Our phones, tablets, laptops, watches and increasingly TVs are now the storefront for every retailer in the world. Our devices now know our credit card details, or shipping address, and should soon know our sizes, tastes and needs. In theory every ad on the internet could be shippable with a swipe of the finger or press of the thumb or shout out to Alexa.
2. Make it easier to extract more money from people
Some industries have grown up with a long history and track record of getting way more money out of people in a simple way. Airlines charge for speedy boarding and seat selection in the booking process but in a booking flow that is so seamless that it never felt like it got in the way. Physical retailers offer small impulse purchases in the lines to pay. But this thinking isn’t everywhere.
People are busy, they don’t have time to think; the mental burden, the cost of time taken, are often more expensive than spending money. Separate people from money faster than ever before.
3. Make products that stand out and create demand
There is this weird sense that somehow the importance of branding is dying, alongside advertising. Nothing could be further from the truth. The more choices we face in life, the less it
appears we want to buy things; the less time we have, the more vital clear branding and sense of meaning become. Of course, it’s trite to say ‘make better things’. We know that already. Every person in every business should be thinking how to make a meaningfully better kettle, pair of jeans, training shoe … . I think there is massive potential for companies to succeed with simply great products. But there is also potential in making brands that just connect more strongly.
We can go from being receptive to the idea of buying something to wanting a specific product now, immediately. The two best examples of this are the iPhone and the Tesla 3.
Before the iPhone, people were largely sold phones or were given them for free. You re-signed your contract and saw what you could get as a reward. People took little interest in phones. The decision architecture was, ‘Do I need to re-sign my contract?’, ‘Which operator should I pick and then what tariff?’. In 2002 you’d select from a flip phone or a candy-bar phone or in 2004 you’d pick a camera phone or a music phone or an ‘enterprise’ phone for e-mail. In 2007, the iPhone entirely changed the purchase funnel. People went from being ‘sold to’ to ‘buying’, from choosing a phone based on network to choosing a network based on phone, from waiting until the contract ends to ‘I don’t care how much I’ll be fined for ending it now’.
The Tesla 3 is somewhat the same. People replace cars when leases are up; they decide what sort of car, then narrow down brands, then test drive a few and make a choice. The Tesla 3 has got people with new cars wanting to switch, people with different formats of cars wanting to change car type. I have no need for a car: I hate owning things, parking costs a fortune, and while I have no desire to buy a car, I kind of want to have a Tesla 3. It’s this sort of allure and product differentiation and brand that companies must aspire to own.