7 Reasons why Digital Transformation Should Start with Design
Digital Transformation without design is like having a time machine we don’t know how to use.
John likes to see himself as a visionary CEO. He reads about all kinds of digital technology and uses innovative products both at home and at the office. In short, he’s connected. He noticed how fast everything is moving towards the future and decided to invest in a new project: building a time machine. The tech and engineering departments got tremendous amounts of resources and encouragements to proceed with the project. And they did it. Proudly, John found himself in front of the time machine, ready to plug it in.
But the time machine’s command panel was extremely complex. Which button should I press? Suddenly, John didn’t know where to go. He realized technology alone couldn’t show him the way.
The way we shape the present and the future still remains uncertain. Luckily, design can help bridge that gap with profound and long-lasting answers. What do people really want. What are they ready for (or not). How can technology create long-term value for businesses.
Here are 7 reasons why leaders should adopt a design perspective to strategize their digital transformation:
Reason #1 — Design focuses on people
There are amazing research centers throughout the world developing powerful technologies. They’re essential to our future. The problem, however, is that they can sometimes be ahead of time.
Let’s take an example from one of the most common household products nowadays: the microwave oven. The microwave cooking process was patented in 1945. By 1971, however, only 1% of households in the US owned a microwave oven. Only in 1986 had it made its way to 25% of American households. It took nearly 30 years for microwave ovens to be actually adopted by consumers. This reminds us innovation is not only about what we can do, but often about what people need, and when they need it. Context plays an important role. People can’t wait. Technology can.
The trick is to identify a clear scope of implementation before making huge investments on technology. What does each technology really mean for current customers, potential customers, employees, and whole industries? Design thinking clears the path for new technologies to land smoothly, at the right place and at the right time.
Reason #2 — Concept-testing and prototyping saves money and time
Big changes are inevitable with digital transformation. Design thinking alleviates the risks of crucial decisions with its iterative approach to innovation. In a nutshell, design-driven companies will prototype products/services in short cycles to be able to validate concepts as soon as possible. By testing iterations with people, they have a much clearer picture of the value of a product before committing to large-scale investments. This reduces moments of uncertainty and avoids costly mistakes.
The Design Sprint by Jake Knapp, formerly Google Ventures, is just one of the ways companies can quickly prototype and test their most ambitious ideas with minimal resources in only 5 days. It’s known to have helped startups such as Nest and Slack to get a strategic kickstart, but also more established companies such as Prudential to better set the stage for new digital products and services.
Since an iterative design approach can be used to validate different kinds of strategic decisions, prototypes can be tested not only with current customers, but also potential customers, employees and company leaders. Whatever change digital transformation may require, design is ready to test it.
Reason #3 — Design helps transform Big Data into Human Data
There’s no doubt that big data is absolutely essential for digital transformation. However, we should avoid conclusions that are not backed up by meaningful user/consumer research. Since the advent of big data, there have been several strategic failures resulting from the oversimplification of data analysis.
For instance, Svetlana Sicular, Gartner research director, has mentioned a case where an insurance company prematurely jumped into big data conclusions without running a thorough qualitative analysis of its consumers. In short, they’ve decided to measure people’s propensity to buying life insurance by studying the relationship between good and bad life habits. This approach has led them to classify people as “smokers and non-smokers”. However, people’s habits involve a whole other range of activities and lifestyles that might not be easily identifiable through big data alone. Some basic questions that designers could have brought forward might include: smoking/health history, exercising, food, emotional behaviors, workload, family structure, and so on. If the insurance company had decided to approach the questions with a design mindset, it might have had success in taking advantage of its data. Or better, it might have uncovered insights that enabled a successful long-term data strategy.
The importance of a design point of view is the emphasis it gives to people’s needs and pain points. Designers master qualitative research, user journey analysis, usability tests, human-factor research, user personas, and so on. Quite often, those bring insights that cannot be revealed by the most granular quantitative data. Sometimes, it takes a human being to sit with another human being to understand what’s really going on. Why do they behave that way? What are the feelings behind all the cookies, clicks and page-views? What’s the human experience like? This kind of questioning will empower companies to better use their data and get to the heart of their problems — and opportunities.
Reason #4 — Great design is omnichannel
Yes, designers are well aware of the latest technologies. But great design will survive through time and space (to avoid the “Houston, we have a problem” effect). That’s because thoughtful experiences are designed for the user, and not for a specific platform.
Let’s look at the film industry for a second. I’m sure you remember Blockbuster. Aka the movie-rental giant that went extinct a few years ago. They were a strong business, but relied too much on existing technologies and platforms. First, came the VHS. Then came the DVDs, and then, the latest video game consoles. Blockbuster eventually followed mainstream technology, and that helped them catch up with the present. But that wasn’t enough. The experience they delivered to their customers still wasn’t omni-channel…
Then, there’s Netflix. You could say they also started out by renting DVDs just like Blockbuster was doing. But their value proposition was actually focused on the customer: a seamless on-demand service experience that just happens to be for movie DVDs. Years later, they still focus on the customer’s needs. Did they stop at DVDs? No. Or maybe computer streaming? Definitely not — just like smartphones and tablets, desktop is just another one of their platforms. Then, perhaps, they depend too much on movie publishers and producers? Nah, they also produce and distribute original content for their customers. Their revenues in 2016: $8.83 billion, growing every year. Now, think again: the platform or the user?
With an omni-channel mindset at work, companies can minimize the impacts of technology flops and innovations that have a short life-cycle. After all, the whole point of digital transformation is to prepare for the future and the long-term impacts of the digital world. And not to adapt your whole strategy to technology X or platform Y just because they’re peaking at the moment.
Reason #5 — Design loves new challenges
The first job of designers is to rethink problems before engaging in solutions. That’s why design thinking approach can be applied to a very broad (if not infinite) range of activities. As Rikke Dam and Teo Siang point out in their article “Design Thinking: New Innovative Thinking for New Problems”, it’s the ideal approach for “addressing problems where multiple spheres collide.”
Think about how the automobile industry has changed over the years. It boomed when efficient manufacturing process (e.g Ford’s and Toyota’s) were used to address consumer individualism. Today, the same industry is working to understand the role of self-driving vehicles — the complete opposite. Another example is home automation, that went from an industry that barely existed a while ago, to a multitude of connected products and services.
Moving forward, each domain can be permanently transformed by an on-demand economy and advanced AI technology. Did you notice the pattern? Exactly, there’s no pattern. There are completely new challenges everyday, and industries as we’ve known are changing at a fast pace.
Organizations can’t use the same old recipes for success, and have to start at the beginning. It’s important to treat every challenge carefully and individually. That’s what design thinking does.
Reason #6 — Human-centered, not just Customer-centered
Customers are at the heart of a digital strategy. That’s no secret. But with the right insights and internal engagement, businesses can enable a culture of transformation right from inside organizations — and not only from a customer standpoint.
Design is a human-centered discipline. It means it’s customer-centered, and more. Differences may seem small but are significant — by focusing on people, designers will not only thrive in understanding your customers’ behavior, but also those of employees, leaders, key partners, stakeholders and representatives.
So how much could that difference cost? According to Altimeter’s report, “The 2017 State of Digital Transformation”, “corporations whose employees are actively engaged outperform peers by 147% in earnings per share.”
Reason #7 — Design-driven leaders are not afraid of the future
In his article “Why is design a CEO matter?”, Tim Brown explains why should the CEO be responsible for empowering a design mindset from the inside-out of organizations. He brilliantly points out that the organization itself is a design project.
Now, let’s talk about a couple examples of successful digital transformation. Airbnb, for instance, completely transformed the tourism and hotel industry. It introduced a new digital intermediary, revealed a new user behavior, and implemented a new business model, all while creating new market value. Another big name in the digital world is Pinterest. They haven’t only built an incredibly valuable business model — already valued at $3.8 billion, but also changed the game for other businesses becoming an active channel for over 150 million monthly users around the world.
What do those two companies have in common? That’s right, they were both founded and led by designers. That’s because design thinking processes are well geared towards embracing change. Design leaders lend a new perspective to companies, while also improving innovation processes. That’s digital transformation. By design.
In summary
Digital Transformation is much more than implementing new technology. It’s a continuous process that raises a lot of questions about our present and our future. When facing this challenge, remember that Digital Transformation should start with design because:
1 — Design focuses on people
2 — Concept-testing and prototyping saves time and money
3 — Design helps transform Big Data into Human Data
4 — Great design is omni-channel
5 — Design loves new challenges
6 — Human-centered, not just Customer-centered
7 — Design-driven leaders are not afraid of the future
Patrick Avril — CEO @ Use Design, a boutique design agency from Paris that brings to life digital strategies, products and services.
Thanks to Back to the Future for helping us all envision the future, and to Quentin (Qwarty) @ Use Design for his drawings.
