Digital Darwinism

by Tom Goodwin

  A lack of money never stopped Nest from making the best thermostat on planet Earth. We see countless large companies make up for a lack of genius by using money to promote poor products and getting people to buy things that they don’t really like or want and which is the most expensive thing on Earth.

  Audacity

  Imagination takes audacity. No market trends showed that a Smoothie for twice the price of a can of Coke and half the size would work. The makers of Red Bull made something tiny and highly priced and became billionaires. We can’t use the past to predict the future. I sat in endless focus groups while testing Nokia smartphones and people hated them: they were too big, too pricey, had only two days battery life and, (I quote) ‘Why would I want the internet on the move, I have it at home’?

  Decision-making also takes audacity. Let’s celebrate the unorthodox and the risky, let’s nurture those who are lazy enough to find better ways, not those who work through problems. Let’s celebrate risk, reward passion and those who persist while feeling vulnerable. Perhaps the wild ideas that didn’t work still need measuring, but in a different way. We need to celebrate not just the weird, wild ideas, but nurture the weird, wild people who make them. And that, for many companies, is hard, because those people often don’t belong in a box marked ‘our values’.

  The problem with contemporary decision-making is not just that we need to learn to say yes, but we also need to learn to say no. To say yes takes guts and an ability to dance with risk – to be aware of it, rather than to be scared of it. As I said in an earlier chapter, the safe space occupied by big companies allows risk to be outsourced, through the purchase and subsequent assimilation of start-ups. However, that risk needs to be brought straight into the C-Suite. If it doesn’t happen, then you have – again, as I mentioned previously – leaders whose goals are centred on a safe route to retirement, rather than a risky but ultimately highly lucrative route to personal and corporate reinvention and success.

  Encouraging risk also requires a change in how we think of reward. Leaders are often given both a golden hello and a golden parachute. Many CEOs are given handsome pay-offs if they fail – and a ‘mutual agreement to resign’ from the board prevents them from being fired. They have no risk whatsoever. The opposite is true of founders, who often live off credit card allowances or remortgages to see their dream through, only finally realizing it on an exit or IPO (bearing in mind that most start-ups fail). For leaders in the C-Suite to really put their careers and intellect to the test, perhaps a little more personal sacrifice would sharpen the mind.

  References

  Berr, J (2016) Employers: New college grads aren’t ready for workplace, CBS News, 17 May, available from: https://www.cbsnews.com/news/employers-new-college-grads-arent-ready-for-workplace/ [last accessed 6 December 2017]

  Bezos, J (2017) Letter to Shareholders, available from: https://www.amazon.com/p/feature/z6o9g6sysxur57t

  Megginson, L (1963) Lessons from Europe for American Business, Southwestern Social Science Quarterly, 44(1), 3–13, p4

  Stephens, R (2008) Marketing is a tax you pay for being unremarkable, speech at the Customer Service is the New Marketing event, New York 4 February

  Sutherland, R (2017) Mastering the future of marketing, speech at the dotmailer Summit, London 1 March

  And in closing

  11

  A final focus on people

  It’s the end of the book so naturally I’m going to ask you to think about the desks you’ve seen lately. Seriously. What did the last hotel desk you checked in at look like? The last car rental counter? The last gate at an airline? What was the last till you paid at like? What does your desk look like at work? It’s strange but we can see technology in the most enlightened fashion at the interface between people and key gateways.

  Hotel check-in desks in slightly above average hotels are fascinating. Arriving at a hotel in the late 1800s you’d be dealt with by a person behind a large sturdy desk. It would have to be large; it was the barrier between you and all those heavy keys. The posher the hotel, the bigger and brassier the keys. The desk was there to store huge quantities of filing, records of visits, letters to patrons, and rules of the establishment. It was there to keep cash in a safe, to probably host some sort of till mechanism. My memory is poor.

  By 1990 hotels were able to reduce the size of the check-in desk. Keys were smaller now, there was a large PC, a credit card carbon copy machine, a huge loud printer behind the desk. A few years later and, let’s say, around 2008 the desks could be smaller still. They could or probably would have a laptop and credit card scanner and a key card programmer. But while the desks could have become smaller, they often hadn’t. Desks were the visual language of the greeting: larger desks implied a grander and more sincere welcome.

  Now, in 2018, funkier hotels have iPads, others have large Macs with glowing apples to broadcast slick and stylish design cues, but the desk remains big and bulky. We know that’s the body language we are checking in with. Typically, you hand over a credit card for incidentals, and are asked to complete their paperwork for them. And that’s fine because this is how life is.

  I’m amazed how little rethinking we’ve done. We have replaced old technology with new, but changed nothing. We assume we need a desk, we assume someone needs to stand behind it, and that this is what arrival looks like. We assume it’s okay to ask for things again that we have already asked for.

  Car rental desks have followed the same evolution, cashier tills the same. We have embellished what we know is needed with new technology. The thing is: it’s entirely wrong.

  It’s not about technology: it’s about empathy

  If, knowing enough about technology to know what’s sensible, slick and reliable, we reconsidered the experience from a customer perspective, things would be wildly different.

  What if we walked into a stunning lobby, and, rather than dragging our bags to a desk, we sat down and someone came to us with an iPad that we signed? What if they kept our credit card details from the booking we had made online earlier, rather than asking for them three times each visit? This is both a tiny and a hugely representative specific example.

  What if car rental locations used iBeacons to know when you were arriving at their premises and then checked real-time car inventory and offered you special offers on upgrades with real-time pricing? What if you could upgrade by seeing the car you’d like at a sensible price and just swiping to the right? What if cashiers in stores came to you?

  We persist in thinking about the technology first. When the brief becomes ‘how can we use augmented reality headsets in airlines?’, we get absurd examples like Air New Zealand demoing head-mounted solutions to help them understand the mood of passengers when really they would freak out any normal person. When the brief is ‘how can we use chatbots?’, we quickly establish a way to irritate our most valuable customers. We have to use technology to solve problems, find better ways to do things we’ve always had to do, but always in the service of the people who pay us money.

  The best-in-class solutions are way more about empathy than they are about technology. They rely on challenging all assumptions of the past, on applying creative solutions around what people want.

  Here are three ways to think about change and empowering your business to succeed.

  Structure around people

  It’s weird to me that hairdressers don’t work around office hours, or that car garages are reluctant to open on a Saturday, let alone a Sunday. Even in New York it’s near impossible to see a doctor during the weekend or late at night. Clearly it suits the workers to work the same hours as the rest of the world, but these are industries designed to serve others. Posh restaurants won’t let you take your bar tab to the dining room, because it’s hard work for them to sort out. Retailers split into e-commerce divisions and physical stores because it’s easier for them.

  Since when has business been about the business more than it is about customers? Too often, if things are hard
it is seen as an excuse not a challenge to be addressed. Every company needs to start working around customers not themselves. They need to create systems, policies and roles that seamlessly face the customer at all stages and retrospectively create structures around this to serve them best. We need to see new roles like ‘chief experience officer’ to support this.

  A brand is what a brand does. It lives in the minds of people not on the brand onions of agency strategists. It’s crazy that hotels spend $200 million easily and readily on advertising campaigns to tell the world they are friendly, and consider this a delightful investment to maximize, but spending the same on a training programme to ensure staff are happier and can serve people better is an avoidable cost to minimize. We regard reducing staff in a call centre as a sensible efficiency that will make customers cross in ways we can’t measure, but spending money on advertising to bring them back is an investment whose success we can easily track.

  This matters. People are more spoiled than ever, they demand more and will share more readily every experience they have, good or bad. A brand is now linked more to ratings online than to what ads tell people to think. Companies have long thought social media was a place to put messages, to tell people what to think about them, but today it doesn’t work like that. If you think keeping customers happy is expensive, then consider the cost of unhappy customers. Your social media strategy in 2018 should be to ensure people have a wonderful experience, and this should permeate everything you do.

  Focus on what matters

  I’ve always thought the best innovation director would be an eight-year-old kid and their mean dad (it’s always the dad’s job to play bad cop). The eight-year-old would endlessly question, ‘Why?’, way beyond normal social acceptance, to really understand the problem. The dad would listen lovingly and then generally bark ‘no’.

  ‘Why’ and ‘no’ are the most helpful words when we seek to drive change.

  Innovation has always been misunderstood to mean more. We thought Nokia was innovative because they made 72 handsets a year, until Apple made a single one and it changed the world. The collective goal of companies has to shift away from doing extra, to work hard on doing less, better.

  Let’s help people make decisions. Let’s help people buy. Let’s remove steps. Automate what can be automated, make choice architecture simple. Innovation should be a reductive endeavour entirely focused on creating the best possible experience for consumers.

  Generally speaking, people in roles doing new things like more. Saying yes means we get to show off more work we’ve done. Saying yes is good for everyone. It’s much more profitable for an agency or consultancy to make a client an entirely futile Apple Watch app, charge them $100,000 to make it, help them invest $10 million on a campaign to promote it, than say no and save them a year of work and a fortune. We get world firsts by saying yes and even if it fails we can ‘test and learn’.

  I would love us to single-mindedly obsess about human beings, not on ‘the next big thing’. Let’s empathize with people in the shopping aisle, not cram a new feature into their lives. In a world that seems more complicated and faster changing than ever, let’s focus on a few things, the things that matter. Let’s do simple things well. No, simplicity isn’t simple. Saying no to the right things is the real skill. But as an end goal it’s essential.

  Rethink the operating system

  A common brief that comes my way is as follows: ‘We’ve made an app, people are not using it and they say it’s not very good. So how can we get more people to download it?’ There is nothing more expensive that advertising and promoting a product that is not best-in-class. It clearly makes no sense, but it happens because of how many businesses operate.

  Most businesses focus primarily on one thing: making things. It’s how they have been structured, with roles like operations, finance, and procurement driving the majority of the processes and investments. With very few exceptions, marketing comes at the end of the process. The big budgets in R&D, the marvellous improvements in factory design, better procurement, new management thinking are all aimed at making better products, more cheaply and faster than before. By the time a product is made, all that those in the marketing department can control is how it is sold, not what is sold. In the whole process consumers are merely the people with the money who end up buying the items, after marketing and advertising has created customer interest in it.

  The vast majority of companies still operate this way. ‘Our factories have made curved screen TVs; go find a way to make people want them.’ ‘We found a way to make a lightbulb talk to a phone; make this seem sexy.’ Very few brands or products are pulled by consumer demand, or co-created with proper research; they are all pushed out by departments and given to marketing to sell.

  Products are made, market sizing is performed, likely price points are modelled and a potential yield is found. On this basis marketing budgets are decided, and then the chief marketing officer (CMO) is armed with ad agencies to invest this money in ensuring these targets are met. Creating demand was the business we were in.

  It seems odd that we spend money pushing products uphill, not making products that sell themselves. In the words of John Willshire we should, ‘Make things people want rather than making people want things’ (Willshire, 2012).

  Companies should find a new operating system that flips this on its head. Establish what people want, use this to inform marketing plans, design experiences and products based on this, decide marketing budgets required, use this to inform factories. Find ways to ensure customer service and experience are what matters. Kickstarter has shown how great products can find willing and enthusiastic audiences with ease. Companies around the world should focus less on pushing the next big thing and more on listening to consumers’ needs, applying their knowledge of technology and design and making things for a group of eager consumers. My first ask: a washing machine that makes some sense.

  A focus on empathy and design thinking

  The well-funded enthusiasm of Silicon Valley is creating excitement and confidence in the idea that new companies know best de facto, and that if you understand coding and software you can take on anyone and win at anything. This goes unchallenged. Is software changing life in such a way that it’s almost easier for a software platform or company with the world’s best coders to become a better bank, than it is for a bank who has tried to recruit the best programmers? Can a car company become an expert in user experience and battery technology, faster than a design-led battery company can learn how to assemble cars? Can a platform like Netflix or Apple, Amazon or Facebook learn how to make great entertainment faster than TV companies or movie studios can learn how to create better distribution mechanisms? The race is on to see what is the best starting point, and often it appears that it’s not being dominant in the past. I think what the incumbent industries need to leverage more is their experience in a particular category. In theory they know more than anyone else what people want and like.

  Peak-end theory, usually attributed to Dr Daniel Kahneman, is where an experience or event is judged based only on two things: how we perform at the peak (the most intense point – good or bad) and at the end of the experience or event (Tran, 2015). Much like a chain is only as strong as its weakest link, so is customer service and our feelings about everything we have experienced.

  I also proffer the thought that increasingly these days people are less forgiving than ever. Customers increasingly don’t really care about how things happen or what the nature of the problem is. It’s not okay to say that computers are running slow today or that there is an exceptional call volume or the computers should not have shown that the product was in stock.

  In the age of computing and digital distractions, empathy seems to be a rare quality.

  I once flew first class with Singapore Airlines. I was offered $300 bottles of champagne without a flinch, was given leather-lined amenity kits and expensive pyjamas for my $14,000 ticket. I guess that’s what you’
d expect. The departure lounge was a delight, perhaps a bit too much obsequious service, caviar on tap and more champagne, yet when I asked to borrow a phone charger, my boarding pass was confiscated until I handed it back. I’m not fussy, it clearly didn’t ruin the experience, I got to Sydney alive, with all limbs, healthy and happy, but it’s a rare glimpse into the world where empathy is lacking and yet money is rife. Why not buy phone chargers in bulk for a dollar, brand them with ‘a gift from Singapore Airlines’ and hope that I take it with me and bring back memories over the months I use it?

  When you enter the amazing flagship Turkish Airlines lounge in Istanbul, with spectacular food and a dazzling interior design, you are met by a vast library of massive, wonderful books and a huge sign saying they are tagged for security and that thieves will be prosecuted. For all the technology in the world, for all the cost of journey mapping, of expensive hardware upgrades, customer service is often about the little things and it’s about humanity and the softness of thoughts.

  I think we tend to think that design is done by designers, that only when you have a black turtle-neck and a book about Dieter Rams can you dare offer suggestions. Maybe I’m weird but I think design is largely common sense, trying different things and thinking. I don’t think it’s that hard. From my frequent flying I’ve noticed that the ratio between arrival screens and departure screens in every airline lounge and every departure concourse is about 50:50. I can’t think of any remotely normal use case where, after passing security, I care one iota about incoming planes, but there they are, freaking me out when I misread them.