Success thought Co-Creation

“Two heads are better than one.”  — John Heywood

 

The organizations that Thomas Lockwood and I researched were not bound by the limitations of their structure or the defined roles people find themselves in. Rather, they invite inclusion, and bring together diverse groups and parties to collaboratively produce mutually benefitting and jointly valued outcomes. Both internally and externally, they deliberately engage people in the act of co-creation, eventually making it a key attribute of their innovative cultures.

The idea of co-creation is not a new concept. In its first forms, it focused on bringing together broader groups of consumers and customers, thereby enabling the provider of a product or service to generate new ideas. It offered a means of bringing together different parties to produce a mutually benefitting outcome. Over time, this resulted in an increased appreciation of the value of understanding the unique experiences and perspectives of customers.

What followed was the acknowledgment and use of co-creation in innovatively thinking about business strategies, structures, systems, and eventually, organizational cultures. Throughout our book, Innovation By Design, there are examples of how organizations use the pull factor to multiply the engagement of the variety of contributors to their design thinking processes.

THE PHILIPS STORY

One of the powerful examples of what happens when an organization takes the idea of co-creation and expands the process to a broader set of participants and applications is Philips, the Dutch technology company that, through its divisions, now focuses its innovation in the areas of health and wellness technology.

Sean Carney is the chief design officer of Royal Philips and is responsible for building the design thinking capabilities throughout the Philips organization. Philips created a branding for their design thinking process. In the spirit of greater involvement, they call their program the Co-Create process framework.

The framework is an embedded component and competency within the company that is forwarded through a company-wide training program and that is part of Philips University and the Philips Business process framework.

Sean joined Philips in 2011, succeeding Philip’s design leader Stephano Marzano. Sean arrived at a time when the company needed to create a shift in its broader business strategy. Over Marzano’s two decades of influence, and following the pioneering design leadership path set by Robert Blaich, Philips had become a design powerhouse and the envy of the product design world. During Marzano’s tenure, Philips Design operated as an internal service provider to the various divisions of the electronics giant, operating essentially as a design agency within the larger organization.

Now the company needed more: a broader and more integrated use of design thinking that would also influence the company’s business strategy.

Integrating design into strategy and practice

Under Sean’s leadership, design has been integrated as a strategy and a practice throughout Philips, contributing to the transformation of the company from being a consumer electronics product and lighting company, into a focused leader in health technology.

This is a dramatic strategic shift and is coupled with how design thinking is now used in the company and its influence on how the company focuses its innovation capability.

The change in separating health technology and lighting also helped move the company from a financial under-performance in 2011 to a return to delivering higher financial returns. According to the Philips Annual Report, in 2016 the company’s net income more than doubled (to €1.5 billion, or $1.8 billion USD) from the previous year and its income from operations increased from €1.0 billion to €1.9 billion, the equivalent of an increase from approximately $1.2 to $2.27 billion USD.

philips healthcare co-creation

As is often the case, though design thinking is credited with the creation of powerful innovation in products and services, it is also a key contributor to the creation of innovative organizational strategies that result in financial outcomes. As is so often the case with strategies that fall into the realm of human resources and organizational development, and that are difficult to track in terms of ROI and measurable financial value, the results at Philips demonstrate a more-than-significant effect on the financial bottom line.

Design thinking is also a key contributor to organizational transformations that get greater financial results.

Success through co-creation

A key to success in engaging the various groups in the co-creation strategy was recognizing the need to position the training in the Philips Academy, thereby allowing it to be scaled throughout the organization. At that time, HR was building a Philips Academy, and the principles of design thinking fit perfectly into that curriculum. Frans van Houten, the CEO of Philips, who was very intrigued about the use and influence of design thinking, assured that the Academy would receive the proper funding. Design and HR worked together to ensure that design thinking was developed and implemented in the organization properly.

The result was the establishment of a “10%–20%–70%” training model—that is,

  • 10 percent of the design thinking team became moderators and co-create leaders,
  • 20 percent of the team acted as coaches, and
  • 70 percent of the team actively focused on the principle of learning by doing, and co-creating with people internal and external to the company.

Important to the successful and meaningful implementation was that the training was applied on real-life challenges, mainly in the healthcare domain.

The different types of challenges varied in the areas of innovation for business strategy, new value propositions, business transformation, and customer engagements.

Design thinking was used to reframe the challenge of how to compete in the sector and to come up with a shared vision from which both internal groups and external partners and stakeholders could explore possible strategies and value propositions. By working on real-life business challenges, the Co-Create program delivered measurable impact and achieved sustainable change for the organization in the transformation of moving from a product company into a healthcare solutions provider.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

CREATING A CHANGE IN MINDSET – THE HUNGER PROJECT

In our book, Innovation by Design, Thomas Lockwood and I identified 10 attributes that give remarkable power to the human-centered aspects of design thinking organizations. Curious confrontation, that is, facing differing ideas and mindsets with the desire to investigate and learn, is one of these aspects.

Throughout our research we found this attribute to be consistently present. Though we can safely say that it isn’t 100 percent of the time present in how things get done, it almost always exists when people are applying design thinking to a problem. And, it is especially valuable when design thinking is used to confront differing viewpoints and conflicts.

Creating a change in mindset – The Hunger Project

Some 40 years ago, in the wake of the Bangladesh famine crisis, the founders of the Hunger Project took on one of humankind’s greatest challenges, ending human hunger. It wasn’t long before they came to the realization that the usual charity responses and resolutions wouldn’t work. They recognized that past efforts did not provide the right solutions because the right problems had not been identified. The key question that needed to be answered was not “How do we do what is being done better?” but “What’s missing in the work of ending hunger?

To broaden and deepen their problem-solving capability, and to think more creatively, they engaged the help of a group of experts and consultants. With the help of the group, they began a deeper inquiry and concluded that it wasn’t a matter of throwing money, and more money, at feeding people.

At that time, they concluded that the real problem was the lack of political will.

In Africa, where women were in the role of farmers, they found poor leadership and a lack of government focus on agriculture. When they confronted this issue further and followed their curiosity, they realized that the real problem was a matter of gender relationships. Though women had the primary responsibility for the feeding and care of the communities they lived in, they were the least empowered.

Confronting the truth and continuously acting from a place of curiosity is not easy.

By looking for what was missing, the Hunger Project found the path to strategically reinvent, shifting from the putting of time and energy into education in richer and wealthier countries, to bottom-up development in underdeveloped and impoverished areas of the world.

Each time the organization reinvented itself it required the ability to confront itself, and its stakeholders, to look for what is true.

As John Coonrod, the Hunger Project’s executive vice president, explains:

Learning how to reinvent has been part of our process. We had to stop doing what we thought we were good at and start addressing what was missing. Not knowing what was next can be hard sometimes. We had to accept that we didn’t know what was next always or how to get there. We referred to it as “climbing a mountain in the fog.” We had to shift our resources and get everyone on board. And then we found out that while leadership was on board, we had failed to engage donors. They didn’t understand the change. To do that, we had to educate them and shift their mindset. Instead of calling them “donors,” we started calling them “investors.” What we learned was that in making strategic shifts, we have to include everyone.

curious confrontation mindset helping to improve humanitarian aid

In the 1990s, the Hunger Project once again reinvented itself.

To confront gender issues at the local and individual levels, the strategy shifted to focus on the transformation of gender relations. However, this time they started with a focus on the broad engagement of investors and creating internal and external alignment. As John points out:

At the heart, ending hunger is about unleashing the human spirit and human dignity. The key to ending hunger is knowing who hungry people truly are. If given a chance, they will end their own hunger. It is about people being able to be in charge of their own lives and destiny. To not be denied the most basic of human rights and principles so that they can be able and capable of taking action in their own lives. Awareness creation is the starting point of a staged program of building people’s confidence, leadership, organizations and skills so that they can set and successfully achieve their own goals. We have a range of capabilities and structures to get things done.

In 1990, in response to typical top-down and charitable responses to hunger, which were often too inefficient and inflexible to meet the challenge of hunger, the Hunger Project, together with the Planning Commission of India, pioneered a new, decentralized, holistic, people-centered approach known as Strategic Planning in Action (SPIA).

This methodology turned traditional planning on its head: The Hunger Project would bring all sectors together, identify a critical gap or opportunity for synergy, and then launch catalytic projects, which would reveal new pathways for action.

More than 20,000 communities in Asia, Africa, and Latin America have applied SPIA to empower people to achieve lasting improvements in health, education, nutrition, and family income.

The leadership of the Hunger Project shows the ability to confront the truth about the context that they were operating in and, through being curious, inquire and explore what changes they and the organization needed to go through. They also had to confront the organization’s myriad stakeholders—some of which could be resistant to change—asking them to also face the current realities, investigate and learn about the different viewpoints that emerged, and be open to the new ideas that offered the possibilities for finding the right solution. Each reinvention of the organization reflects a deeper exploration and understanding of the right problem to be solved.

For the Hunger Project, to create such a change in mindset requires the attribute of curious confrontation.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

DESIGN THINKING AS A CONFRONTATION TOOL

One of the culture keys, and a cornerstone to how people interpret culture, is how disagreement and team conflict are managed. It has a great deal to do with how people feel safe in a culture, including their experience of what is acceptable and safe behavior, and what is considered unacceptable and unsafe. More than at any other moment in time, people learn about the culture they’re in when they experience conflict.

Curious Confrontation:

Facing differing ideas and mindsets with the desire to investigate and learn.

One of the questions that Thomas Lockwood and I asked when researching our book Innovation by Design focused on the influence that the use of design thinking has on how people manage disagreement and conflict. This ended up providing us one of the key attributes consistent across our study group organizations,

We ended up five insights that stood out as being the most significant:

  1. Design thinking provides an effective tool for confronting and managing disagreement and conflict.
  2. Organizations using design thinking have a belief in and positive mindset about curiosity.
  3. People who use design thinking demonstrate better inquiry and listening skills, which is the key to effectively managing disagreement and conflict.
  4. Because design thinking skills can be applied to dealing with disagreement and conflict, confrontation happens in a more timely and healthier manner, thereby avoiding much of the dysfunction and consequences associated with it.
  5. Design thinking is a valued process for confronting disagreements and misalignments among functions, and their leaders, and effectively breaking down unhealthy silos.

One of the greatest challenges any organization or team will face lies in how it effectively manages disagreement and conflict.

The process of design thinking creates a platform for the constructive management of diverse thinking and strategies, and the conflict that often naturally results. Viewing disagreement and conflict as an opportunity is a quality design thinking organizations can engage in. It’s an aspect of creativity and innovation that is natural to any environment in which people are committed to finding and creating the best solutions possible.

team conflict and the benefits of design thinking

Team Conflict, Competition and Creativity

When managed properly as part of an organization’s culture, the commitment to viewing team conflict and disagreement as an opportunity for creativity can be leveraged as a means to drive more innovative solutions to market. When teams compete with one another, it can also add to the speed at which innovation takes place.

A good example of such an environment is at some of the Samsung research and design centers. Here, several design thinking teams are established to work on the same challenges, at the same time. The teams work independently, don’t communicate with one another, and often don’t even know about the work of other teams. Their goal is to use design thinking to discover new products and services needs and solutions within a specific domain. This does not appear to be a case of lack of management coordination, but rather a case of putting more resources into solving a given problem area to increase the probability of success.

In this environment, internal design thinking team competitiveness is encouraged, and it seems quite practical in that corporate culture. This may be one of the reasons Samsung innovation seems to be far outpacing Apple innovation in recent years.

Although internally competing groups and teams—when clearly articulated as part of an organization’s culture and led in a healthy manner—can provide a great benefit, it can also backfire, leading to a lack of information sharing and unwarranted redundancy and duplication. It can also result in a more critical win-lose environment or the bringing to market of products not fully realized. Despite some hiccups along the way, Samsung has used this approach with a great deal of success.

Developing Conflict-Management Skills

As leaders show a willingness to support the teaching of design thinking skills to their employees, they soon become aware of the benefit they get from its use as a team conflict management tool. This includes paying more attention to the development of communication and conflict skills that support its success.

Because design thinking is a way of leading with curiosity, it encourages embracing ambiguity, uncertainty, and confusion. In doing so, people come to understand the value of listening to one another, allowing for the creative process of building one idea upon another. It also feeds the ability of people to move from a reliance on individual creativity and contribution, to behaving more collaboratively and engaging in shared creativity.

It all leads back to the understanding that an openness to listening to one another results in improved levels of inquiry, a necessary element in effectively and resolving conflict.

The skills of listening and seeking understanding are key to empathy, the first step in the design thinking process.

Genuine inquiry and open listening are paramount for users of design thinking to be successful and, as the result of lessened levels of fear, leads to the increased levels of emotional maturity and safety that directly impact how conflict is constructively managed. The result of lesser levels of fear translates into the free expression that leads to the ability of people to engage in the idea generation that feeds the process of co-creation.

When applied to conflicts, design thinking results in greater openness and faster generation of ideas, better feedback loops, and less competition over whose idea is better.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

UNDERSTANDING THE CUSTOMER EXPERIENCE: PART FOUR

Part Four: Awareness Design, The Fifth Order

Over the past two decades, and with the furthering of social media, our business environment has evolved into one in which the relationships between companies and their customers are becoming more open and interlinked. With the acceleration of changes in technology that advance our capability to communicate and create a broader array of customer and user experience, the application of design has also accelerated.

As a result, the true market leaders in the design of the most innovative customer experiences are creating a context in which customers are becoming active members in the design of the very products and services that they are buying. More and more, customers get to influence how products and services are created, branded, sold, and delivered.

With these shifts, comes a new set of requirements for organizations, their leaders, and the people in them to better understand the motivations of their customers. They must better understand the customer desires for attention, competency and caring and how to engage in their delivery through brand experience. To attain success, more open systems and engaging means of participation are required. Ultimately, this requires the application of design thinking to engage the customer in a manner that aligns their experience with the brand intention.

 

Relentless, Rapid Change

How we have used design thinking has changed rapidly and we now find ourselves responding to a new way of experiencing our world. More and more, we are questioning how and why we interact with one another in the way we do. We question intention and purpose, what our motivations are, and whether those align with the intention and purpose of the organizations we buy from. For this reason, we recognize that to be successful, the providers of products and services need to engage and align with their customers at more emotional levels and with greater consciousness of what they are seeking and why they are seeking it.

If we add to this need for greater awareness to the development of our capacity to innovate, the way in which we participate with one another will continue to expand and change. The shift to improved transparency also requires us to more consciously design and develop the cultures and learning capacities of our organizations that actually include and give attention to both external and internal customers.

The evolution of design that has unfolded over the past century is likely best explained by Richard Buchanan’s Four Orders of Design. Buchanan, a professor of design, management, and information systems, suggests that as an organization matures in its use of design. It tends to move from visual design and graphic communication to industrial design and products, then to brands and interactions, and then, finally, to systems. Buchanan summarized in the Fourth Order that attention shifts to the design of systems in which people interact with one another, including businesses, organizations, education, and governments.

 

Taking It To The Next Level

A great way to define design thinking organizations is to see them as learning organizations, using design thinking to increase understanding of real problems, of customers, of obstacles, of options, of knowledge, and of one another. In effect, by using design thinking to empower creativity and collective imagination, organizations develop the means to step further toward what lies at the core of human-centered experiences – our basic human needs and motivation. By adding the customer to the mix, one can readily experience the power that comes with it.

Powered by design thinking at scale, a new level of awareness is enabled. Design thinking actually is the creation of awareness and the sharing of knowledge. Design thinking provides a methodology that both naturally and intentionally leverages the collective imagination and transforms the cultures of organizations into being more innovative. Along with providing the means for cultural transformation, it also provides organizations with the opportunity to step into the Fifth Order of Design – Awareness. In doing so, as part of the process, companies are able to engage customers in such a way that they become more aware of their own personal experience. Furthermore, as a key ingredient to their involvement, they are able to discover and better understand how and why they are motivated as customers.

By applying the Fifth Order of Awareness Design, along with setting the stage for designing the intentional interaction of people, we move from the intellectual exercise of product and service design to the emotional aspects of human behavior. This involves a keen understanding of who and why, resulting in the creative expression of how. What better way to discover new possibilities than through inviting the customer to explore their awareness of their own motivation and desire? They’re asked to integrate that learning into the design of a product or service and their ideal experience.

 

The Future of Awareness Design

Where does the Fifth Order eventually take us? As we tap further into human motivation and create the context for increased customer awareness, we improve the probability that, as customers, we will elevate and expand the role and value of emotional intelligence. As a result and consequence of increasing consciousness, we will escalate our expectations for how products and services more directly respond to and fulfill our desires and needs. We will become, almost certainly, more demanding and want to play a more integral part in the design of what we wish to buy and expect even more transparency of how it happens.

Needless to say, the Fifth Order provides a bounty of opportunity, much of which will come to light as we unfold its potential and creatively expand its application. From the broadened development of design thinking processes that further engage customers, to the application of design awareness, to AI and new technologies for immediate customer and user responsiveness, and to its use in tackling wicked problems, Awareness Design may likely be the most powerful aspect of design imaginable. If not, it will very likely be a powerful step towards finding it.

 

Edgar Papke is an award winning speaker, leadership coach, and business consultant. He and Thomas Lockwood are the co-authors of Innovation By Design and founders of InnoAlignment, a consultancy dedicated to assisting leaders in designing and building cultures of innovation. Edgar is also the author of the books True Alignment and The Elephant In the Boardroom and can be contacted by email: edgar@edgarpapke.com

UNDERSTANDING THE CUSTOMER EXPERIENCE: PART THREE

Part Three: Designing Loyalty to Brands

A goal of any product or service is for the customer to emotionally identify with its brand and, as a result, for the customer to trust enough in their experience that they are willing to continue to buy and use it into the future. Furthermore, the aim is that the customer will become an advocate for that brand. The resulting benefit is brand loyalty.

 

The Aim Is Trust

Since brand loyalty and the trust associated with it is the aim of just about any company, it’s evident that it should also be an outcome of how design thinking is applied to the creation of any product or service. In making brand a priority outcome, it also reminds those involved in the process to focus on the emotional aspects of the customer’s experience and the resulting trust. After all, brand loyalty, like any form of human trust, is about the meaning and trust associated with the experience.

As we continue to peel away the layers of human-centered design and apply empathy, we find ourselves on the journey toward further understanding human emotion and the underlying sources of desire and motivation.  In the last installment of this series, I focused on the three key human motivations that reside at the core of our experience as customers and users: attention, competency, and caring.  As customers, these three motivations are the keys to how we relate to our experience and how our emotional requirements are met.

 

The Creative Alignment of Brand and Emotion

Focusing on the three human desires allows us to better design products and services, aligning them to meet a customer’s emotional requirements. These are requirements that, when met, provide the emotional fulfillment that translates into the customer’s perception of value. The customer’s choice to come back for a particular product or service results in their loyalty to the brand.

Recognizing the relationship of emotion and brand provides us with an endless set of opportunities through which to understand the customer and more intentionally engage in the rich design of human-centered solutions. It also provides a much more abundant lens through which to empathize, develop more insightful contextual inquiry, and increase the focus on the understanding of the second perspective. Furthermore, the ability to articulate a brand intention offers the ability to more readily define how ideas may align to the customer’s motivation, help in the design of key questions and inquiries, and create an awareness of how out-of-the-box ideas can bring benefit.

 

Six Brand Intentions, Six Paths to Loyalty

Building on the three aforementioned human motivations for attention, competency, and caring, we find that there are six distinct ways in which we brand products and services. In the book True Alignment, I detail the six brand intentions and provide insight into, and examples, for each of the six. What is important to realize is that each is a natural extension of the underlying human desire and motivation. Each provides a framework for the collection of information and data, as well as its application in the design process.

 

Connecting Customer Desires to Brand Intentions

 

The first of the three human desires is attentionThe two brand intentions that result from this motivation are community and customization.

 

Community

Community describes services or products that invite and deliver community membership, offering relationship, affiliation and connection, the reciprocity of attention, and sharing a common identity with others. Examples of innovative brands delivering community include Facebook, Starbuck’s, Harley-Davidson, and Disney.

Customization

Customization is described as the design and delivery of products and services to reflect the customer’s wants, delivering customer empowerment, assumes that the customer knows best, and focuses on their ownership of the solution. These include such brands as Etsy, Land’s End, and 4imprint. In the case of attention-centered brand intentions, the participation of the customer in the design thinking process comes rather naturally.

 

The second customer motivation is competency. While the two brand intentions of pre-eminence and low price may at first appear to be contradictory, they are both driven by the application of expertise and know-how.

 

Pre-Eminence

Pre-eminent brands include SAP, McKinsey, BMW, Intuit, and Apple. The focus of design is on delivering product and/or service superiority, delivering innovation and cutting edge uniqueness, or providing tailored solutions by applying expertise and competency to solve the customer’s problem.

Low Price

Low price is focused on delivering price advantage and on innovating to provide operational excellence and efficiency, resulting in customer savings. This includes the sense of competency associated with getting the best price or deal. Brands pursuing delivery of this brand intention include Amazon, IKEA, Target, and Dell. In the case of competency-centered brands, the customers involvement in design is better aligned through the application of well-defined processes and approaches.

Pre-eminence and low price allow the customer to trust in the competency of the product and service provider, as well as help the customer to recognize their own competency and capability.

 

 The two brand intentions that respond to the customer’s motivation for caring are physical wellbeing and personal actualization.

 

Physical Wellbeing

Physical wellbeing focuses on the design and delivery of products and services that deliver physical health and welfare, help one to feel good, and create a physically enriching experience. Physical wellbeing brands include Whole Foods, TempurPedic, Nutrilite, and Weightwatchers.

Personal Actualization

Personal Actualization brands include Oprah, The Hunger Project, Tony Robbins and the various offerings of spiritual growth and personal development. The focus is on supporting personal growth, delivering customer self-actualization and psychological realization, and helping the customer to pursue the ideal self. When it comes to the caring brand intentions, design thinking is free-wheeling and best served through an emphasis on creativity and free expression, and the customer is engaged through the desire to explore what’s possible.

 

Aligning Innovation to Brand

For our book Innovation By Design, my co-author, Thomas Lockwood, and I researched and conducted interviews with 21 highly innovative organizations. One aspect of the success of the study group members is the direct result of their brand loyalty – the emotional investment of customers resulting from their ability to innovate in alignment to their clearly articulated brand intention. Such alignment is demonstrated both through the consistency through which they pursue the design of solutions that respond to their customers’ emotional desires and motivations. They are able to leverage the alignment of their brand intention in how they engage in the design thinking process extremely well.  

Having a clear understanding and alignment of their design thinking process to their brand intention provides a more focused approach. It also provides for a sense of clarity for those involved in the process to assure that their efforts are not outside the parameters of their customers’ expectations, nor that of their organization. The result is the consistent delivery of innovations that solicit customer trust…and loyalty.  

 

Edgar Papke is an award winning speaker, leadership coach, and business consultant. He and Thomas Lockwood are the co-authors of Innovation By Design and founders of InnoAlignment, a consultancy dedicated to assisting leaders in designing and building cultures of innovation. Edgar is also the author of the books True Alignment and The Elephant In the Boardroom and can be contacted by email: edgar@edgarpapke.com

UNDERSTANDING THE CUSTOMER EXPERIENCE: PART TWO

Part Two: Designing Customer Happiness

What makes for a happy customer experience? How can you better design a user experience that evokes happiness? What are the key elements you need to consider?

There’s a broad set of influences and circumstances that are part of every customer experience. At face value, these elements fall into two particular categories: those that we perceive as predictable and feel a sense of having influence on and those that we look upon as unpredictable or uncontrollable. The latter includes elements like the kind of day a person is having and a host of many other factors that are often considered outside the realm of predictable aspects of a customer’s experience.

There are also challenges associated with defining what “happiness” is. Once we are able to define it, how do we consciously apply it to better empathize with customers and design more meaningful customer experiences? How do we create interactions that leave the customer feeling not just satisfied but, rather, deliver an experience that provides the customer with the feeling of happiness?  

In the current edition of The New Yorker, David Owen provides a profile of HappyOrNot, the company that offers the ability to measure customer satisfaction through the use of simple terminals at the point of the actual customer experience. As an example, as customers left a chain of convenience stores, they were offered to rate their experience by pressing one of the terminal’s buttons labeled “very happy, pretty happy, pretty unhappy, or very unhappy.” The idea is that if one collects enough of the immediate responses to the question of whether – in the moment – the customer is happy or not, it results in enough data to discover what makes the customer happy, as well as what gets in the way. Still, in order to be successful, we need a definition for, and an understanding of, what human happiness is.

Happiness Is…

In the simplest of terms, happiness is defined as a state of well-being and contentment, the result of a pleasurable or satisfying experience. Our happiness is the emotional informant of how we experience a product or service and how we ultimately determine the meaning and trust in the things we buy. This defines how we come to trust and become loyal to specific brands. For this reason alone, it’s important for us to know what the sources of happiness are and how we can use data, observation, and contextual inquiry to better understand and apply them. As human beings, defining what makes us happy is a natural pursuit. From the perspective that we are all, twenty-four hours a day, in one way or another, customers, the idea of happiness is at the center of our experience.

The Customer Code

As a way to better understand the sources of happiness, in the book True Alignment, I provide a framework for understanding, interpreting, and applying three sources of emotional fulfillment that make up what I call the customer code, which provides insight into the human desires for attention, competency and caring.

On the upside, we are happy when our desires are being met. On the downside, we are unhappy when our desires are not being responded to. This also means that happiness exists when we do not feel a sense of fear that results from not getting our desires met. For this reason, it’s vital that we pay attention to the three customer desires and motivations: attention, competency, and caring.

1. Attention

Attention fulfills our need to feel important and supports our desire to know that we count, that we matter. The opposite is to feel ignored. As customers, we interpret feeling ignored as not being valued or significant. This is a powerful psychological force and, as with most emotional responses, it is immediate. Think about the last time you called for customer service and went through several prompts before you got a person on the phone. The innovative design of chat and messenger are means through which services pay more immediate attention to the customer. It doesn’t take much for the lack of attention to get in the way of our happiness and leave us feeling anxious, upset, or angry. This is why it’s hard for even the greatest of brands to recover from ignoring the customer. It also explains why the connectivity afforded by social media has become such a dominant force in marketing.

When it comes to the need for attention, our happiness is derived from feeling important and significant. It is also why we are more content when we are listened to and actually feel heard.

2. Competency

Competency is the sense of control and emotional wellbeing that comes from feeling like we made the right decision. As part of our customer experience, we expect providers of products or services to be competent in creating and delivering whatever it is we’re spending our money for, including the level of reliability and quality we associate with it. As a result, we make comparisons about the quality, appearance, and associated pricing because we want to get the best value for our dollar, which allows us feel competent and in control. Whether we’re buying online or experiencing direct contact with a person making the transaction, we expect the experience to be designed in a customer-oriented and competent manner, allowing us to feel, and be, more successful.

As customers, when we perceive we made a good decision, the source of happiness is feeling competent that we made the right choice. When we perceive that we made a bad choice, we feel incompetent and experience the anxiety that accompanies the embarrassment of making the wrong decision. We are left feeling stupid and that we failed. Not a good outcome for anyone, this feeling most often results in us trying to find someone to blame. When the expected competency is not provided, we are naturally disappointed and resent the provider for letting us down. Yet, ultimately, we question whether we were incompetent in making the actual buying decision. If we are fooled or make a bad decision, we no longer feel competent. Competency is a powerful source of happiness.

3. Caring

Caring reflects the happiness and contentment we get from others treating us for who we are, fellow human beings. When we pay for a product or service, we expect our experience to be one through which we are treated with dignity and respect, and to get what we are promised. In this sense, our customer experience begins with how transparent and honest the provider is in marketing, advertising, and selling. Caring conveys that you’ll be truthful with me and that I can trust in how you offer and deliver to your promised customer experience.

Unfortunately, all too often, we seem to have become accustomed to accepting less than we bargained for. We know that advertising is not always accurate and, more often, it tests the boundaries of truth and reality. Still, we expect that the makers and deliverers of the products or services that we want will inevitably do the right thing and come through on their promise.

While truth in advertising is one example, environmental responsibility, fair trade, and social benefit are examples of how caring is experienced in broader ways. Along with our singular experience of integrity and trust, the failure to create a shared value is interpreted as a lack of caring about us as a community of customers and users, and our larger world. When it comes to caring, our happiness is measured by how truthful the product or service provider is. What they do is measured in terms of what is ethical and “right” and, ultimately, honest.

Happiness Data and Inquiry

At face value, data on customer happiness allows us to better understand an individual’s immediate emotional response and offers us insights and clues into an actual experience. It’s important to recognize how powerful contextual inquiry and the integration of data to human-centered design can be. To be successful requires us to have the ability to, first and foremost, be able to define what “happiness” is for our customers. Then we can more effectively apply our use of empathy to better understand the human desire that lies at the source of that happiness.

It all points back to the commitment to inquiry and empathy. Once we are open to relating to one another’s perspectives, we can better understand our own. After all, the reason we spend every moment of our lives being customers is to pursue our happiness. It’s our human nature to do so.

UP NEXT:

In Part Three of this series on understanding the customer experience, we’ll explore the alignment of brand intention to the design process.

Edgar Papke is an award winning speaker, leadership coach, and business consultant. He and Thomas Lockwood are the co-authors of Innovation By Design and founders of InnoAlignment, a consultancy dedicated to assisting leaders in designing and building cultures of innovation. Edgar is also the author of the books True Alignment and The Elephant In the Boardroom and can be contacted by email: edgar@edgarpapke.com

 

UNDERSTANDING THE CUSTOMER EXPERIENCE: PART ONE

Part One: Perspectives of Empathy

In this week’s blog, whether you’re a novice or experienced user of design thinking, I invite you to begin exploring how you can better understand the human experience and use design thinking to design and deliver great customer experiences, as well as apply it to solve the most complex of problems… even the wicked ones. In doing so, we’ll delve into and unfold a better understanding of the emotion and motivations that lie at the core of our human experience. We’ll peel back the layers of what makes up the customer experience and explore our unrelenting pursuit of human-centered design. In doing so, you’ll likely broaden your perspective and thinking, and discover how you can more creatively engage in, and contribute to, the delivery of great customer and user experiences. Along the way, you may also find the means through which to solve even the most perplexing of problems you face.

Since last November’s release of our new book Innovation By Design, I have traveled across the United States, delivering workshops focusing on “How to Design and Lead Cultures of Innovation.” Throughout my interactions with attendees, inevitably, the conversation focuses on the need for empathy, and the interpretation of human motivation. A common conclusion we reach is that without having an understanding of the human motivation and desire, it’s pretty much impossible to understand the customer or user experience (let alone to be able to interpret what and why people are attracted to buy or use a particular product or service).

Like most endeavors, the quality and value of the steps we take in any process or plan directly reflect the clarity with which we understand the desired outcome. In other words, it pays to begin with the end in mind. Adhering to this thinking shifts our attention to recognizing the importance of the very first step we take. In any business, the end game is the creation, offering, and supplying of a product or service that offers a solution to customer’s problem and fulfills their desire or need. It is this fulfillment that lies at the heart of the customer experience and business success.  

The Evolving “Megatrend”

As an approach to understanding the customer experience, design thinking is very likely the most useful and powerful approach developed to date. It is also probably why design thinking has been so broadly adopted by innovative thinkers and organizations everywhere and why we’ve come to recognize it as an evolving “megatrend” in business. It’s one thing to provide a process for problem solving. It’s another thing to capture and elevate our shared human experience. Design thinking differs from other problem solving methods by offering a more creative, human-centered approach that requires a more significant level of understanding of the human motivation. This is also what makes it that much more applicable to a broader set of business and social problems than most other methods.  

Why does design thinking work so well?

Let’s start at the top and begin by looking into the actual process and the core steps or phases of design thinking. The following steps are relatively consistent across the variety of tailored approaches:

  • Empathizing
  • Defining the Right Problem
  • Ideation or Creating Solutions
  • Prototyping
  • Testing

A simple explanation is that right at the outset, design thinking centers squarely on the human experience. It thereby allows us to not only better understand a customer’s behavior, but also to better interpret and understand the emotional influences and motivations behind that behavior. Ultimately, this deeper understanding of a customer or user’s experience allows us to design products and services to more fully and accurately respond to and fulfill our underlying human desires.

Of importance is recognizing that in order to successfully reach the end game and offer a solution that responds to a human desire, one needs to understand the significant role that empathy plays. The realization that being effective is using empathy and requires the development of the knowledge and skills necessary to engage in contextual inquiry. Without having a framework for interpreting human behavior and motivation, it is difficult to truly appreciate empathy and be open to its influence. Without this, it’s rather difficult (if not impossible) to seek and define the right problem that needs to be confronted and solved. Hence, the first step in the design thinking process of empathizing is vital to achieving the right end game.

Two Perspectives

One of the keys to achieving true empathy and arriving at the right end game is to embrace the idea that when we engage with others, there are always at least two perspectives. Embracing this simple yet powerful idea is coming to the understanding that to be successful in taking the first step of design thinking.

The first is our own perspective, requiring that we have an awareness of the views, beliefs, and values we hold. These elements are fundamental to understanding our own experiences. This is made even more powerful when we begin to examine why we think about, see, and feel about things in the manner we do. This form of self-inquiry lends itself to us better understanding our own motivations and desires and how they inform our relationship to, and interpretation of, our own experiences. We thereby reach a point at which we not only better recognize our own biases, we begin to recognize that others think, see, and feel differently than we do. Furthermore, we begin to develop the ability to explore our own individual perspective and uncover how it informs our interpretation of another person’s experience.

The second perspective is that of the other person and requires us to have the ability to be open to it. One can easily see why being conscious of the first perspective is the key to being open to listening to, exploring, and ultimately, to understanding another person’s experience and being more empathetic. In simple terms, we must be conscious of our own set of values, beliefs, and motivations to be open to exploring those of another person. Only when we are conscious of our own first perspective can we fully embrace the second perspective, as well as begin to truly understand others.

There’s a great deal of truth in the expression, “To understand others, I must first understand myself.”  Among my workshop attendees, there is significant evidence that they understand this at an intellectual level. It’s when we move into deeper exploration and begin to connect to the emotional and motivational level, that they are more challenged. In fact, many do not have a framework or approach to better interpret a customer’s emotional experience. By no coincidence, many of them have not explored their own experiences at that level.

The result?

If we’re unable to interpret our own emotion and motivation, it becomes very difficult to empathize with the experience of others. All too often, in the end, what we believe is an ideal customer experience differs from that of another person. Or, in other words, what we think we’re delivering through our product or service to satisfy a customer can so easily be far off the mark. Furthermore, without having an understanding and consciousness of the first perspective, it’s almost impossible to move from the first perspective (our own) to a second perspective, making it impossible to engage in true empathy. Unfortunately, this lack of knowledge and understanding is also what gets in the way of co-creation, collaboration, and teamwork, as well as the open inquiry necessary for curious confrontation and the soliciting and understanding of differing points of view, including our understanding of the customer.

On the other hand, through the ability to be more conscious of our emotion, motivation, values and beliefs, we unlock the incredible creativity that we are capable of and that allows us to do what human beings do best…innovate. It enables us to engage in design thinking and leverage our natural ability to participate in valued collaboration with one another, freely express ourselves and share our ideas, and pursue knowledge and find the right solutions to event the most difficult of problems.

The Next Question

That leads us to the next question. Is there a framework and approach that helps us to empathize with the customer, as well as with one another?

In my next blog, I’ll invite you to explore a proven framework through which you can better interpret and understand the emotional and motivational aspects of the customer, as well as those you work and live with. In doing so, we’ll uncover the means through which we can develop our ability to understand the first and second perspectives, and increase our ability to empathize and creatively solve problems together…even the wicked ones.  

Edgar Papke and Thomas Lockwood are the authors of  Innovation By Design and founders of InnoAlignment, a consultancy dedicated to assisting leaders in designing and building cultures of innovation, a consultancy dedicated to assisting leaders in designing and building cultures of innovation. Edgar is also an international award-winning speaker, leadership coach, and the author of the books True Alignment and The Elephant In The Boardroom.

CHANGE THE PROCESS, CHANGE THE CULTURE

As we unfold the new calendar year, I’d like to begin by focusing on how leaders and their organizations and teams can be more innovative in taking on the challenges that lie ahead.   

Design guru Thomas Lockwood and I dedicated a great deal of the last two years to researching and defining the makeup and characteristics of innovative organizations. We synthesized our findings in our new book, Innovation by Design. As the result of our research, along with identifying the need for alignment, we defined the Ten Attributes that the organizations in our worldwide study group all share. In doing so, we inevitably found ourselves at the intersection of design thinking, innovation and corporate culture. Through better understanding this convergence, we also arrived at the appreciation that by changing the approach to innovation – or altering the process – the leaders of organizations can influence the mindset of their members to be more possibility-oriented in their thinking and behavior, and to act more innovatively. This insight helps us to better understand the influence of design thinking and why the attribute of design thinking at scale is as powerful as it is.

In part, for organizations to reap the benefits of design thinking at scale, it requires leaders to undertake three key strategies:

  • Train people in the use and application of design thinking.
  • Apply design thinking organization-wide for problem solving, decision making, and planning, including its application in strategic planning, product and service design, as well as process and system design, thereby ultimately maintaining a focus on and alignment to the customer and user experience.
  • Incorporate leadership role modeling in the use and support of design thinking throughout their organizations.   

 

Scaling Innovation

We went into our study focusing on organizations that are recognized as using design thinking as a source of innovation and business performance. What we didn’t expect was the scale at which some of the companies and organizations are applying it. Here is a snapshot of the significant numbers of people that have been trained at a few leading companies:

  • SAP has trained 20,000 employees
  • IBM has trained 50,000 employees
  • Intuit, over 10,000 employees (that’s is the entire company)
  • Kaiser, 15,000 people
  • GE Healthcare, 6,000
  • Marriott, 5,000
  • Deutche Telekom, 8,000
  • Philips, 5,000
  • Visa, 10 percent of their workforce.

This set of numbers tells a story in itself.

In some of the companies, design thinking was strategically seen as a function, a means through which to engage its membership on a larger scale. In others, we observed how design thinking spread, adding a belief in innovation and dramatically increasing its value. In some, it was approached from the top down while, in others, it started as means for which to solve a particular problem in one part of the organization and people were naturally drawn to its qualities and wanted in on the game. In still others, it was a part of human resource and organizational development strategies that were delivered through training and facilitation. What was consistent is that, regardless of how it was happening, how it was introduced, implemented, and integrated, people are drawn to participating in design thinking.

Eventually, people perceive their role in the organization as one of being a contributor to the innovative process. As a result, all three key elements of culture – participation, expertise and authenticity – are influenced. The changes become apparent in the observable shifts in behavior, that further manifest in the beliefs and values of an organization. Eventually, this changes the mindset of people and their experience, and their interpretation and mindset about the culture.

The Lessons

One big lesson is that any organization, of any size, can use design thinking as a means to influence culture and achieve greater levels of innovation. Regardless of size, the scaling through an organization, and whether it is 10 people or 300,000, the more people know about how to engage in design thinking, the greater the level of innovation. We also found that among our study group of innovators, the scale of adoption and use varied, as did the manner in which they implemented and integrated it (we include a full chapter about this in the book, Innovation by Design).

The other big lesson is the need for aligned leadership – that success requires that leaders demonstrate their commitment to design thinking and its use as the go-to creative and problem-solving process. This is accomplished through leadership’s role modeling and support of the use of design thinking throughout their organizations. When it comes to culture, leaders are responsible not only for articulating mission, vision, and strategy. They are accountable for role modeling and reinforcing the processes and behaviors of innovation. Ultimately, they are the influencers of how to use the process of design thinking to influence changes in behavior. The result is the change to an organization’s culture and the mindset of its members to think and act more innovatively. When it comes to leading an innovative culture, it’s always about alignment.

 

Edgar Papke and Thomas Lockwood are the authors of  Innovation By Design and founders of InnoAlignment, a consultancy dedicated to assisting leaders in designing and building cultures of innovation.

CULTURE AWARENESS: SIMPLIFYING THE PATH TO INNOVATION

Culture informs people how to individually and collectively achieve success, and to understand what is acceptable and unacceptable behavior. As a result, it is at the core of how people come together to innovate. That being said, how does a leader assess and understand the culture of their organization enough to know what its sources of innovation are? And, how can we simplify the path and know how to get there?

These are not uncommon questions. In fact, more and more studies and ideas are focusing on how leaders and organizations can better understand how innovative they are and how they can better leverage the sources of innovation at their disposal. This is not a new phenomenon. Throughout the history of business, we have found ourselves trying to figure out how to maximize our human potential. Today, more 
than ever, companies and institutions of all 
types and sizes are concentrating on the creation of more innovative cultures.

To get a sense of the magnitude of how important innovation is perceived to be to the success of today’s organizations, one just has to look at the title of KPMG’s 2016 Global CEO survey, aptly titled “Now or Never. ” The executive summary delivers a clear message, sharing that “two-thirds of CEOs believe that the next three years will be more critical than the last fifty years. The forces creating this inflection point are the rapidly evolving technology and the speed of transformation it unleashes. In four years’ time 4 out of 10 CEOs expect to be running significantly transformed companies.

In response to the pursuit for greater innovation, the marketplace now offers a host of tools and instruments, all aimed at collecting enough data – and the right data – to tell how well the members of a team or organization are able to
 work together to be more innovative. As a result, in pursuit of innovation, we have created intricate organizations, with many moving parts, all further adding to the complexity of our lives—until we come to the place of recognizing what the great designer Dieter Rams pointed out many years ago: “less, but better.” For, when all is said and done, more than science or the collection and use of data, the quest to understand how to create higher levels of innovation leads us back to the quest to better understand human nature.

What most of us have come to realize is that we’re arriving at a place in time that what will serve us best is simplicity. We’re looking for solutions to the resulting emotional stress that all the moving parts and advanced technology creates in our lives. By doing so, we are able to release the creativity required for the further innovation we seek. It’s a matter of doing it in smarter and in simpler ways.

The solution that many of the world’s most innovative organizations have learned to rely on is the use of design thinking. In conducting the research for our new book, Innovation By Design, Thomas Lockwood and I conducted an in-depth study of 21 of the world’s most innovative design thinking organizations. Among a host of great discoveries, including the identification of 10 key attributes, we found that while every organization has a unique culture, those that succeed are able to figure out how to integrate design thinking. That is, through better understanding their culture, they were able to implement and integrate design thinking into it more successfully.

The organizations in our study group learned to use design thinking to simplify and better leverage the human-centered processes through which to innovate.

What they further demonstrate is the ability to apply a systematic approach to understanding and better leveraging their unique culture. This is the attribute we call Culture Awareness: Understanding how to implement and use design thinking in a manner that is in alignment to the organization’s culture. In our book, Thomas and I provide the framework for how they were able to accomplish this success, including the definitions and keys to understanding the three culture types: participation, expertise, and authenticity cultures.

The successful introduction and implementation of any change is reliant on the ability of an organization’s leadership to have an in-depth understanding of culture. In doing so, they can better understand the basic tenets of behavior, and how individual and collective innovation and success is achieved. As the stories of 21 of the world’s most innovative organizations in Innovation By Design demonstrate, such understanding is one of the great undertakings and keys to successfully simplifying and leveraging innovation. The value of having a framework for assessing and understanding culture cannot be understated in leading innovation. Nor can the need for simplicity and a focus on human nature.

Edgar Papke and Thomas Lockwood are the authors of Innovation By Design and founders of InnoAlignment, a consultancy dedicated to assisting leaders in designing and building cultures of innovation.

CURIOUS CONFRONTATION: A KEY TO INNOVATIVE CULTURES

One of the essential characteristics of creative and highly innovative cultures is their ability to recognize and leverage conflict.

Granted, for any organization or team, one of the greatest challenges it faces is how to effectively manage competing interests, differing views, disagreement, and multiple mindsets, all of which are natural sources of conflict. However, when managed through the framework of design thinking, they’re also great contributors to innovation.

The struggle for most organizations and their leaders is in finding the right approach to confronting and realizing the potential for innovation that resides in the natural creativity that lives in the multitude of conflicts that they deal with. Conflicts are all too often avoided, thereby leaving the sources of innovation and creativity untapped. One of the most powerful solutions to finding the right “how” for many of the most innovative organizations is their use of design thinking.

Design thinking is a way of leading with creativity and it encourages embracing ambiguity and uncertainty. It offers a platform for managing diverse thinking and strategies and, in doing so, it offers the opportunity to curiously confront conflicts in a constructive way. In spending resources to teach design thinking to their members and develop it as a core competency, organizations leverage the benefit they get from using it as a management tool for converting disagreement into the fuel necessary for innovation.

In our research that led to the writing of our new book Innovation By Design, Thomas Lockwood and I identified ten attributes that the 21 highly innovative, design thinking organizations in our study group all possess. The one that we found to consistently lead to constructively managing conflict is Curious Confrontation. We define Curious Confrontation as: The ability to face differing ideas and mindsets with the desire to investigate and learn. When confronting conflict, it is the ability to act with curiosity that results in the intentional inquiry and appreciation of differing points of view and mindsets that inevitably results in healthy collaboration. 

Along with research that finds a sense of curiosity as a characteristic of genius, one’s curiosity quotient (CQ) is also a critical contributor to one’s level of social intelligence. Research shows that curious people have more friends, more significant relationships, and are viewed by others more highly than those with less curiosity. In light of their increased ability to be more inquiring, others see them as more considerate, interested, and empathetic. As a result, they are seen as more likable. Research also indicates that people who are curious are happier, healthier, more productive, and have better social relationships. The reality is that every organization has its struggles in dealing with the differing points of view, values, and beliefs we all have. As a result, we don’t generally listen to one another very well. While confronting conflict has more than its fair share of negative connotation attached to it, acting intentionally with curiosity sets the stage for the openness and trust necessary for free expression and higher levels of creativity and innovation. This, in turn, builds empathy.

Empathy is paramount for users of design thinking.

Through our research, we found that not only does design thinking provide a framework for people to express themselves, it also provides a platform for listening and empathy. Empathy, as displayed through genuine inquiry and expression, is paramount for users of design thinking. As the result of lessened levels of fear, empathy leads to the increased levels of emotional maturity and safety that directly impact how diverse views and ideas are constructively managed. This results in a significant influence on an organization or team’s culture. A cornerstone to how people interpret culture, and often the first impression that people get about what is acceptable and unacceptable behavior, is based on their experience of how disagreement and conflict are managed. More than at any other moment in time, people learn about the culture they’re in when they experience conflict and discover what feels safe, as well as what feels unsafe.

By asking how design thinking helps people manage disagreement and conflict in our research, we came to recognize the importance that curiosity plays in the intentional management of conflict as the source of innovation that it is. Curious Confrontation is the key attribute that consistently plays a role across our study group organizations to foster empathy and create healthy relationships that support teamwork and lead to innovation.

In summary:

  • Design thinking provides an effective tool for confronting and managing disagreement and conflict.
  • Organizations using design thinking have a belief in, and positive mindset about, curiosity.
  • People who use design thinking demonstrate better inquiry, empathy, and listening skills, which is key in managing disagreement and conflict effectively, and building trust.
  • Because design thinking skills can be applied to dealing with disagreement and conflict, confrontation happens in a more timely and healthier manner, thereby avoiding much of the dysfunction and consequences associated with avoidance.
  • Design thinking is a valued process for confronting disagreements and misalignment’s among functions, and their leaders, and effectively breaking down unhealthy silos.
  • This creates synergy, design thinking organizations leverage creativity.

Edgar Papke and Thomas Lockwood are the authors of Innovation By Design and founders of InnoAlignment, a consultancy dedicated to assisting leaders in designing and building cultures of innovation.