Category

Blog articles

Remote Working Hints & Tips

By | Blog articles | No Comments

As companies start implementing work from home policies, the key question that emerges is how to do this effectively. Teams that are used to face to face contact and meetings need to be taught new ways of working together to maintain effectiveness.

The good news is that work from home can often lead to an increase in productivity once these ways of working are mastered.

Through DYDX’s experience with working with companies across Europe and Africa on “future of work” and building team behaviours to support digitisation, there are a range of tips we can share.

The most important one is taking some time to set up new working agreements. This may seem arbitrary but changing how you work requires new agreements between people working together, to avoid unnecessary frustration and communication breakdowns. This is because a physical space provides a lot of social and spatial queues that we don’t have in virtual spaces or in remote working.

Nevo Hadas, Partner at DYDX, unpacks key areas that if not implemented successfully will lead to breakdowns.  The opportunity is for the team to discuss and agree, thereby improving teamwork while remote:

Availability

  1. Immediacy:  you are used to walking up to somebody to get an answer and now you sent them a message or an email and … nothing. Reaching an agreement regarding how long people will take to respond before you escalate and how to deal with urgent requests helps clear up a lot of frustration in the team.
  2. Shared Schedules:  just because you can’t see people being busy doesn’t mean they aren’t. Team members should be good at sharing calendars of when they are at meetings or working on a document/project and should not be disturbed or won’t respond. This helps everyone understand what availability is. This also means that you should check a member’s calendar before calling them, if it’s urgent, send them a message and wait for a response.
  3. Economise your time: You will have a lot more calls now that you are remote, but not everything needs to be one hour. Think about the meeting structures and agendas carefully and allocate shorter periods of time. You would be surprised what can be achieved in 15/20 minutes of focused conversation.
  4. Agree on working hours. While there is the legislated time of work but that does not convert as effectively into virtual work as you would think. Now that you don’t have to commute, don’t use that time instinctively for working or sleeping.  Develop a routine to use that time effectively, either exercising, reading or online study. While we may think that having calls/meetings for more hours is increasing productivity it’s actually not, there is a limit to how long you are effective in these mediums. Allocate time for deep-work (i.e. don’t disturb) versus meetings if possible.

Work from home

Video/Voice Call etiquette and format

Video or voice call etiquette is a real thing.  These elements always trip people up:

  1. Share the call location (i.e. dial-in number/links etc) on the meeting request
  2. Prepare the platform. If you don’t have the right software, download it before the meeting starts (see the tech section for more on that.)
  3. Have a good headset that is either plugged into your laptop or phone.
  4. Be in a quiet space.
  5. Mute when you aren’t speaking. Background noises can be very distracting.
  6. Have a clear agenda (just like a physical meeting).
  7. Use video if you have the bandwidth or at least for a couple of minutes to say hi, there is nothing wrong with doing voice only.
  8. Decide a meeting cut-off time i.e. if you haven’t joined the meeting in 10min, please don’t join late.
  9. Not all calls have to follow the same format. You can choose or create a variety of call formats that will increase productivity for the type of meeting. i.e. a decision-making forum could use individual voting (many online tools have this) and then a discussion.
  10. Checkin/checkout – what is done visually after a meeting by looking for discomfort in attendees needs to be done more consciously in virtual meetings. Take the time to ensure that everyone is on board by checking-in when closing a meeting.
  11. Distractions are a real challenge on calls and it is easy to lose people’s attention in key moments. Etiquette agreements can make this clear i.e. don’t respond to your emails while in the meeting.
  12. Having fun is still important. Create channels and spaces where people can share silly gifs or other jokes. Allow people to still enjoy communication but also agree on how to bring it back to the topic.

Sharing Information

How will you share information and progress, is there a common folder everyone can work in, is there a directory structure? While these are obvious to many people the need to have a common space that you can use increases with remote working.

Personal workspace

Take breaks throughout the day and recognise them as breaks, the fear is people will think you are slacking off but very few people actually work non-stop for 8 hours a day. Grab a coffee, take a walk, chat to a friend.

Different zones in the house may be useful, i.e. morning versus afternoon spaces, as long as they are quiet with low background noise or conference calls become a nightmare.

Technology

Choose tools that work for your teams i.e. don’t let IT dictate things that just don’t function for you. Experiment with different tools before deciding. Agree on the tools you will use and make sure everyone has them and knows how they work. If you have people who are new to remote working, dedicate some time to onboard them into how the new tools work. It only takes a few minutes but saves a lot of frustration.

Collaboration tools provide a new way of working together. Everything from slides to diagrams can now be done using these tools. You may find that you need more than one tool depending on what you are doing.

Here is our list of tools, though it may not be right for you:

  1. G-Suite (Google) – this is our basic workspace i.e. slides, docs, sheets (excel), storage, email all live here and allow us to collaborate on work done.
  2. Slack – this is our communication space. We have channels per project where teams discuss issues and share document links (the documents live in G-Suite)
  3. Asana – task management to ensure people are on track. Each person can update their own tasks which is a big plus and reduces unnecessary status calls and stand-ups.
  4. Lucid-chart – this is what we use for diagramming complex flows for designing working processes
  5. Pipefy – this is what we use for expense and invoice management and it is integrated with
  6. Xero – which we use for accounting.
  7. Zoom/Hangouts/Slack – is what we use for calls, but varying call quality may make us switch from time to time.

Experiment

Even if you are highly experienced in working remotely, the practice of experimenting with new ways of working can improve your effectiveness and overall experience. Experiments don’t need to be anything big (e.g. today we will try a quick check-in before starting or a check-out at finishing), but do introduce some novelty and re-engage your team, it provides an active learning mindset that can build a team’s cohesiveness.

The most important factor for remote teams to be effective is not the productivity tools they choose, nor is it how smart they are. The most important factor for success in distributed teams is a common set of behaviours – an agreed team culture. Backed-up by research, our own experiences with global clients, and common sense, along with the Dutch government, we created the Culture Canvas: Making culture actionable to help you shape your team’s culture.

You can find it and download the free eBook here.

Case study: Vodacom

By | Blog articles | No Comments

Background

Vodacom, a subsidiary of Vodafone, has been undergoing an agile transformation, accelerating not only the impact and innovation in its’ business but also on its agencies. As one of the largest advertisers on the African continent, the volume of work generated by it is immense. Co-ordination across multiple agency partners, internal approvers, and marketing specialists became a key factor in the smooth running of the system.

The challenge

Vodacom marketing needed to prepare its marketing suppliers to both increase the pace and volume of work while staying within the existing budgetary constraints. With over 300 people involved in the ecosystem between internal stakeholders and suppliers, this was no small task.

People, Process, Systems

For any new system to take hold, people need to buy into it. This means that before you can re-engineer the processes, you have to create a behavioural change within the teams that enables the new to replace the old. While many leaders speak about change, few are willing to change. Vodacom’s leadership team drove the change and championed the initiatives.

Creating Agile Processes 

Agile, was not developed with marketing in mind. The first phase of the project required understanding how we implement agile with the different agencies and Vodacom through a series of workshops and immersions. Using service design methodologies, we mapped out the existing process flows to identify points of friction and emotional distress both at the agencies and at Vodacom.

It quickly became apparent that there were challenges on both sides of the table and the teams came together to identify process solutions to improve their ability to work together. A hybrid KANBAN process was developed clearly identifying handover and quality requirements to simplify interactions.

Service Design

With this understanding, the processes were mapped and revisions made to ways of working. The volume of work however quickly outstripped any physical board and a digital platform was required to support this volume of work. Choosing between a series of vendors by prototyping the process. Pipefy was selected as a technology platform due to its functionality and ease of deployment.

Prototyping change

From working with one agency, we moved into all of the agencies. All we had learned by working with Ogilvy (the lead agency), was transferred into an onboarding program. This took all of the agency teams through an agile marketing immersion, service design to reimagine processes and systems customisation, enabling each agency to work in their preferred way to meet their objective but still provide a unified overview for Vodacom.

Systems development

The challenge with process development is that it often looks great on paper but doesn’t work as expected in the real world. Working closely with the Pipefy teams in Brazil and the agencies, the system development followed an agile methodology with weekly iterations being developed, tested by users and modified based on their feedback.

Support and change management

A support and change management process was put in place to make rapid changes as issues were discovered in the process and new ideas were developed. A steering committee of users was identified to give ongoing feedback on new changes to ensure that fixes did not create new challenges.

Outcomes

From inception to live, the project encompassed 6 months. While implementing new systems is never easy, the results have been impressive. The number of active jobs managed by the system rapidly grew to almost 100% of the total jobs delivered, over the first 3 months, and as the teams settled into the new ways of working, the increased visibility has benefited all the parties.

Learnings:

You cannot change systems without changing behaviours. Behaviour change is an adaptive problem (i.e. has no obvious solution) vs a technical problem (i.e. known solution) because each team and its leadership dynamics are different. Without allowing the users to feel a sense of mastery and control over the new systems, you won’t get adoption – so having an inclusive process is key.

Inclusion, however, does not mean death by committee and facilitating a strong plan of action with short term momentum (i.e. weekly reviews, decisions and changes based on decisions) drives the project to completion. The ability to prototype and test the process on the new system quickly was critical to the success of the project. Post-implementation support and change management ensure ongoing utilisation.

trends 2020

Digital Transformation in 2020, No Trends, No Code, No Design, No Email, No Consumers.

By | Blog articles, Recent Posts | No Comments

Trend predictions are for Fendi, Gucci, and Chanel. Even Louis Vitton opening their new restaurant in Osaka is a trend for luxury brands, following Burberry, Ralph Lauren, Tiffany’s. But, in digital transformation, there are things that, if you aren’t already doing, you should be doing. And what you should be doing depends on your particular business and who your customers and employees are — not trends.

 

Partner at DYDX, formerly Head of Digital Marketing at Investec Group, Templar Wales explains how you should approach digital transformation in 2020.

 

No Email — & the Future of Work

 

Email might always have a small role for formalising agreements, just like paper still has a small role but we find that in workshops on team behaviour, most agree that emails (asynchronous) should be replaced by something like Slack because its synchronous, organised, and the right people are in the right channels — no “who should I CC?” issues.

 

But what’s important is that the people in the team agree on new behaviours (even if just by majority consensus), commit to trying, and don’t lapse to old ways when they’re stressed or under pressure. And even if they do lapse, that they just get back on the bus again.

 

The Future of Work is not about selecting and implementing new software. Successful transformation is about shifting teams’ behaviour and skills to use the software and continuously measuring and improving the systems and processes.

 

No Code — & XaaS

 

Yes, there will always be some code to be written but most of the functionality we need is readily available as a service. This means faster implementation, more flexibility and manageable costs. All the time you save building services should be spent on defining the customer or employee experience from end to end, weaving the services together into a more seamless journey and automating anything that computers do better and faster than us mere mortals.

 

By the time you scope, build and test your Metropolis it’ll be out of date.

 

Transform at the speed of life.

 

No Design — & Better Design

 

There is still lots of design and the experience is vital to the use of a product or service. But with the rapid adoption of voice commands and apps that communicate with us primarily through audio, and minimising visual engagement, we need to consider how people experience brands and their services without aesthetic cues. All of the design decisions you made in the past need to be accounted for in audio.

 

In both visual and sound design, less is better — don’t let your ideas and brand get in the way of a good user experience.

 

No Consumers, No Users — & the Rise of the Human

 

AI, machine learning and automation feel like they could threaten our jobs and our security but in most cases they free us up to be more human — giving us more time to do the stuff we’re good at and neural networks aren’t (for now).

 

Digital transformation is all about improving the human experience, about solving human problems. Service Design and Design Thinking are rooted in Human Centred Design. The person you’re solving for is at the centre of the solution, not your very, very clever engineering.

 

So, we need to stop thinking of people as ‘users’ and ‘consumers’ and start seeing them as customers, employees and partners. It might sound like semantics but the language we use changes the way we see experience things.

 

While I’m on this point, stop saying ‘Millennials’. People of all ages, colours and shapes have certain emotions and behaviours. Capture those feelings and behaviours and design for them but seeing Millennials as a segment is just laziness.

 

No end

 

Transformation is not an end goal, it’s not a project, it’s an approach to ongoing improvement. It will become as normal as IT which used to be a ‘thing’. In 2020 transformation will mature to be more pragmatic, more measurable and more achievable.

 

“When digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar”.

George Westerman of MIT

 

Why Nick Cave knows more about AI than futurists do

By | Blog articles | No Comments

Yuval Harrari, in his book 21 Lessons for the 21st Century, speaks about an AI knowing us so well, that it knows how to write the perfect song for us to enhance or change our mood. While the science and technology sound intriguing and potentially possible, the very idea of it seems to miss the point of what music is about.

We love songs for the stories they convey, but the stories are often subtle and filled with social cues that go beyond melody and harmony. The story of the artist imbues a song with depth, a song about heartbreak can fill us with even more compassion as we hear the artist’s story writing the song versus just the lyrics. Think of “Dance Me to the End of Love” by Leonard Cohen; it’s a beautiful song made more beautiful by its story of his decades-long love affair with Marianne Ihlen.

Songs are also not solitary or personalised (other than maybe for the artist). It is about a shared experience of the human condition. Other fans provide us with a sense of belonging, sharing music we love with friends makes us feel more connected. Personally, I love it when my kids go to see the Pixies, which is my favorite band. It brings us closer together versus each having our own set of music that is personalised to the point that it has no common meaning.

Nobody says this better than Nick Cave in his response to the question by a fan. Could an AI have written “Smells like Teen Spirit”? Maybe… could it have had the same tragic delivery, frustration and ultimate suicide that give the song its meaning beyond the chords? No. We confuse the aesthetic with the outcome – but that’s not how humans work.

Read his letter below, it’s well worth it:

Nick Cave, answering a Slovenian fan’s question: ‘Considering human imagination the last piece of wilderness, do you think AI will ever be able to write a good song?’

Dear Peter,

In Yuval Noah Harari’s new book 21 Lessons for the 21st Century, he writes that Artificial Intelligence, with its limitless potential and connectedness, will ultimately render many humans redundant in the workplace. This sounds entirely feasible. However, he goes on to say that AI will be able to write better songs than humans can. He says, and excuse my simplistic summation, that we listen to songs to make us feel certain things and that in the future AI will simply be able to map the individual mind and create songs tailored exclusively to our own particular mental algorithms, that can make us feel, with far more intensity and precision, whatever it is we want to feel. If we are feeling sad and want to feel happy we simply listen to our bespoke AI happy song and the job will be done.

But, I am not sure that this is all songs do. Of course, we go to songs to make us feel something — happy, sad, sexy, homesick, excited or whatever — but this is not all a song does. What a great song makes us feel is a sense of awe. There is a reason for this. A sense of awe is almost exclusively predicated on our limitations as human beings. It is entirely to do with our audacity as humans to reach beyond our potential.

It is perfectly conceivable that AI could produce a song as good as Nirvana’s “Smells Like Teen Spirit,” for example, and that it ticked all the boxes required to make us feel what a song like that should make us feel — in this case, excited and rebellious, let’s say. It is also feasible that AI could produce a song that makes us feel these same feelings, but more intensely than any human songwriter could do.

But, I don’t feel that when we listen to “Smells Like Teen Spirit” it is only the song that we are listening to. It feels to me, that what we are actually listening to is a withdrawn and alienated young man’s journey out of the small American town of Aberdeen — a young man who by any measure was a walking bundle of dysfunction and human limitation — a young man who had the temerity to howl his particular pain into a microphone and in doing so, by way of the heavens, reach into the hearts of a generation.

We are also listening to Iggy Pop walk across his audience’s hands and smear himself in peanut butter whilst singing 1970. We are listening to Beethoven compose the Ninth Symphony while almost totally deaf. We are listening to Prince, that tiny cluster of purple atoms, singing in the pouring rain at the Super Bowl and blowing everyone’s minds. We are listening to Nina Simone stuff all her rage and disappointment into the most tender of love songs. We are listening to Paganini continue to play his Stradivarius as the strings snapped. We are listening to Jimi Hendrix kneel and set fire to his own instrument.

What we are actually listening to is human limitation and the audacity to transcend it. Artificial Intelligence, for all its unlimited potential, simply doesn’t have this capacity. How could it? And this is the essence of transcendence. If we have limitless potential then what is there to transcend? And therefore what is the purpose of the imagination at all. Music has the ability to touch the celestial sphere with the tips of its fingers and the awe and wonder we feel is in the desperate temerity of the reach, not just the outcome. Where is the transcendent splendour in unlimited potential? So to answer your question, Peter, AI would have the capacity to write a good song, but not a great one. It lacks the nerve.

Love, Nick

By Nevo Hadas – Nevo is the Founding Partner of DYDX

The future of work requires a rethink on economic “productivity”

By | Blog articles

Adam Smith was 43 and lived with his mother when he wrote “The Wealth of Nations”. His concept of the circular economy (people work, earn wages, buy stuff, which in turn creates work, so we hire more people) ignored the fact that children had to be raised and cared for. It assumed that they magically appeared in the workforce (almost like Smurfs), and also missed that the effect of increased production could pollute and deplete the planet’s resources. Somehow, arguably even against his recommendations, this became our dominant way of thought.

Basically put, almost everything men did was productive, while raising children or looking after frail parents was not. Increasing rent due to scarcity is measured as productive even though it requires no additional work and produces zero new goods or benefits. So the productivity that has been defined is clearly linked to monetary value versus social return or more goods in the marketplace. Largely speaking, more money equals more productivity.

But why does our definition of productivity matter? Because it is a frame against which we evaluate our days and what we consider to be work. We now view the productive parts of the day as those where we earned a living and those parts of the day where we cared for others (or ourselves) as wasteful or a hassle from a productivity perspective. For a future of work scenario that delivers a different outcome both economically, ecologically and socially, we need to rethink the fundamentals of what productivity is. This rethink will allow a lot of the issues we struggle with currently, such as the time spent at work versus the productive value of that time, to be simplified. 

One of the key challenges of the Future Of Work is balancing the growing demand for shorter work days or better work life balance with the need to meet shareholder expectations i.e. profit. These shareholders are often not faceless multi-nationals bent on money grubbing but everyday people who rely on the profits as a way to support their retirements or buy a house, so we need to respect that this is an important outcome. 

Currently many firm’s only way of managing staff cost is through work-hour agreements and not productivity to cost agreements i.e. you will be here x many hours per day, and if you aren’t there is an issue. 

However, this doesn’t mean that firms and their shareholders don’t want (and increasingly will want) to value the greater social impact that they have contributed to over financial return. This is the same social fabric that makes their lives better. A busy executive who might earn less but not be required to pay for an au pair may prefer to finish earlier and pick kids up from school.  Perhaps with a different view of productivity, governments will reward companies whose staff are raising kids or supporting the elderly with incentives to contribute to the fabric of society as this reduces society’s burden. Companies will focus more on productivity measures that are not linked to time (i know this did go horribly wrong in the beginning of industrialisation, but maybe society is better now). 

Our experiments with this have been mixed, but generally speaking, people that have kids and want their own time to pursue passion projects, side-gigs or just gig with us really like it. It increases autonomy and the quality of work is great. For some this is a life choice and for some a phase of life. Where the model suffers is where the expectation is more like a corporate environment i.e. work as many hours as possible to earn as much as possible. While we love this too, output based work is much harder to manage in those environments because people naturally tend to overwork tasks to fill the time and their focus is a little on distraction versus purely output. Looked at in another way, when you give an experienced specialist who is now a stay at home parent (or whatever the situation) the chance to work through some complicated issues, they spend more time on actually doing the work and feeding back than somebody who is doing 10 tasks because they are in the office and distracted by endless meetings. It means more people, each doing smaller chunks of work but at higher quality output because they spend more time actually working.

In many ways we have been trained by remuneration models to behave in a way that justifies time spent in an office, so it’s a deeply ingrained system from industrial age working habits. New ideas feel outlandish and dangerous (at least, they do to me because I am old according to my kids), but that doesn’t mean we shouldn’t be exploring them. If we don’t change the way we work to meet the requirements of the new digital era, we will keep on using industrial age models which miss the point. Working different is critical for doing different (and better) work.

By Nevo Hadas – Nevo is the Founding Partner of DYDX

When Good Culture Becomes Bad

By | Blog articles

In 1997’s Boston Macworld, Steve Jobs was BOOed by Mac enthusiasts. 

He had just come back to save the company he loved and told the audience about the adoption of IE as the default browser. The crowd hissed and booed and Steve Jobs broke into an impromptu sermon: “If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win Microsoft has to lose. OK? We have to embrace a notion that for Apple to win Apple has to do a really good job, and if others are going to help us, that’s great, cause we need all the help we can get. And if we screw up and we don’t do a good job, it’s not somebody else’s fault. It’s our fault. So, I think that’s a very important perspective.”

Do not doubt that Jobs had created the culture which led to his booing by building the mythology of apple being better than the rest during his time leading Mac. He needed to shift the companies mindset away from doing it alone to partnering and encompassing others to be successful.

“Culture in many ways define a company’s response to reality because it becomes the unspoken filter through which all information is processed.”

Microsoft under Balmer failed to shift from their bold strategy of “a computer on every desktop” when smartphones came about. Doubling down on a windows centric strategy was Balmer’s downfall and it happened because the company could not accept the change in reality.

That’s the trap of culture, you can’t see your own blindspots because your mental model doesn’t allow them in. We often espouse “culture east strategy for breakfast” but in truth, culture is often an outcome of success. It becomes ingrained because it delivers/delivered results. It is the companies greatest asset until, one day, it’s the biggest liability. The problem is the stronger the culture the less likely you are to see that switch coming.

This becomes ingrained in behavior; the pride that people have in doing a task really well stops them from seeing when the world has changed. And that by doing that task, a digital environment is destroying value for their customer and not creating it (like it used to). This transition happens so quickly, that their key defense is to create elaborate processes to recreate a manual set of tasks that should be eradicated. “What will our people do” trumps “how do we do a great job faster for our customers”.

This is where the role of a leader is so critical; to be brave enough to change the culture by, like Steve Jobs, changing underlying beliefs that everyone has about themselves and fundamentally, what they do to create value.

By Nevo Hadas – Nevo is the Founding Partner of &Innovation, now DYDX

The obesity epidemic caused by the low-fat era

By | Blog articles

In the 90’s the US government proclaimed that unsaturated fat was what made people gain weight. The low-fat category, packed with sugar-laden treats, was launched to help dieters looking for a healthy snack.

All of the research led to a greater variety of low-fat foods being needed because consumers wanted to eat healthy, easily and lose weight. The key underlying assumption was wrong, but everyone took it for granted as a fact. The spiral of research was only looking for answers within the bias i.e. every problem that came up (people are gaining weight) was looked at against the solution of — make more sugary low-fat foods.

A less obvious element, however, is the impact on the entire field of dieting. Diets became hard (or harder). You were eating the right low-fat foods but getting fatter. People became demotivated, the concept of “easy fix” was touted even more, before you know it you have a multi-billion dollar industry that is doing exactly the opposite of what it wasn’t meant to do.

This is the bubble that assumptions cause, they blinker you to the proof around you as you strive forward, researching based on your assumptions versus the outcomes of your actions.

Pragmatically, this doesn’t mean that going against the grain would have been useful. To sell high-fat, low-sugar (which is what occurs today) you need a broader system of belief that supports your product can build on. It does raise the question of what you aren’t asking or taking for granted. What are you assuming to be a given because that is your context that may actually not be true?

For us this came up in a recent study looking at improving the medical care experience for a new healthcare company, SUSU, launching in France & West Africa. The service focuses on delivering better care for patients by improving their medical experience and structuring their treatments more effectively.

One of the common themes was that doctors visits were generally avoided as they were difficult, making treatment more complicated when they did finally occur. On mapping the experience in-country we could see how much friction around payments and general appointment management existed for patients.

Our biased assumption was that western style appointments would work and that arriving at a clinic and waiting for a whole day at the doctor was unnecessary (which is what the current experience is). However, when we dug under the surface we found that many patients found the idea of scheduling an appointment complex and undesirable. In an environment where getting across the city can be complicated (irregular public transport, no consistent street addresses, bad traffic etc) making an appointment that you (or the people before you) may miss is frustrating, as you will just end up waiting anyway. Not making an appointment and arriving to wait your turn seems easier and less stressful.

Just like low-fat diets, we assume the scheduled event is better because that is what we know and have been told. Appointments assume that everyone in the system keeps to them or they fail quickly. Solving the problem becomes choosing between a systemic design challenge (change everyone’s behavior), a transactional design challenge (change behavior just for our clients) or a situational design challenge(change the situation for our clients). Our guiding principle at SUSU is care — which means our solutions were to make the process as comfortable and efficient for the customers as possible.

While we have opted for a situational solution as the best initial approach, the key component is putting in place the benchmarks that test not only the positive feedback i.e. was this a “better” experience, but the actual outcome of the system by looking at the number of doctors visits and attendance. Real metrics that point to success or failure of a solution vs assumptions (number of appointments made).

Uncomfortable in Uncertainty

By | Blog articles

There is a useful model that breaks knowledge into:

  • what we know
  • what we know we dont know and
  • what we don’t know we don’t know.

It’s a great reminder of uncertainty and our lack of awareness of all the issues in the problem we are trying to solve, especially in bigger systems. Why is this important? because the most critical part of solving a problem is asking the right question, and to ask “the” right question you need to ask lots  and lots of questions. By answering lots of questions you expand the “what you know you know” and the “what you know you dont know”.

Answers mirror the questions they rise, or fall, to meet

Our business cultures are focused on quick results, quick answers, but sometimes slow is better if it creates a 10x better outcome. By slow I don’t mean “thinking” or “brainstorming” or analyses paralysis , but a systemic process using multiple mental models and research tools that expose different facets of a problem… That make you ask better quality questions.

There are too few workshops discussing what the right question is, and too many workshops glibly power-pointing the same answer that you gave a client last week.

By Nevo Hadas – Nevo is the Founding Partner of &Innovation, now DYDX

First to Market Myth

By | Blog articles

We’ve been unseasonably busy with two new fintech projects and two new media projects for very different markets happening at the same time.

The fintech projects could be disruptive, while the media projects would be exponential opportunities for our client. Neither are first to market, which is a big plus … because very few first to market (and I struggle to think of any) really end up the winners in a disruptive industry or are necessary in an exponential one (actually second or third is best).

There is an interesting distinction in the type of business model you adopt between “disruptive” (which for the sake of cynicism we will re-phrase as demand-side expansion at price points that traditional sector competitors cannot sustainably meet) and exponential (new customers and new revenue opportunities from existing customers) products.

The big difference is the business model… no, not the customer experience (I can already feel the heat from the burning torches, shouts of the mob and threatening glints of the pitchforks waving in the air)  … the underlying way you generate value must be priced differently to unlock a market that previously could either not access these services due to distribution OR increase demand by making it cheaper.

Here are some examples: 

Google – Google was not the first search engine, it was probably the 50th. All it did was do less, faster and appear to do it better (initially, this could have been debated). The cost per click model (which they “borrowed” from another competitor) was what made them so disruptive. Instead of paying for ads served, you paid for clicks delivered and it was an auction (genius). The self service component meant you could place the ads yourself and many small businesses that struggled to afford advertising before, plus large businesses that understood the benefits of paying for clicks vs impressions were on board. Print ads suddenly looked ridiculously expensive and unfairly priced.

Uber – nope, not the first call-a-car service. Initially it was aimed at high-end hotels and car services and “borrowed” the low cost model from Lyft…but they made it really easy to become a driver and opened up the market for “non-licensed” cabs to be added to the service at a lower cost of operation for the cab, which meant a lower price per mile, which meant more customers would use the service. Yes, it’s a great experience… but a great experience at double the cost doesn’t mean disruption and massive consumer adoption.

A great experience with a real price benefit to consumers that existing companies struggle to meet due to their cost base – that’s all kinds of sexy. It means you get existing customers and attract new ones. This leads to a “disruption” as the entire value chain gets up-ended with both new suppliers and customers at a new price point.

By Nevo Hadas – Nevo is the Founding Partner of &Innovation, now DYDX

Pricing, NOT pretty design, drives digital disruption

By | Blog articles

Price*, is the key part of a great experience and fundamental to Customer Experience (though hardly ever part of the design phase). It also indicates a fundamental shift in the underlying business model, especially when the price point shifts significantly for the good/service due to a digital channel being adopted.

At its core, digital disruption is caused by the resetting of price due to a change in distribution models as the customer’s point of purchase evolves.

In economics talk:

Price changes are led by an increase in supply (which has been pent up with no access to market) due to a rapid increase in distribution options without a rent seeking gatekeeper (oligopoly/monopoly), restricting access to the market. The supply side increase pushes down the price to the demand side, creating a groundswell of support for the new distribution channel and increasing demand beyond the new supply levels. Demand, once increased, in turn promotes additional supply often at a lower cost. After a few years the new distribution model benefits from a network effect and gains traction. It attracts significant external capital at a low cost to build a momentum moat. The rest, as they say, is a post-modern rags-to-riches overnight success story of ivy league drop-outs.

Shorter distribution lines = lower price to customer at same margin

From an Economics 101 perspective, it’s a little bit backward, as high prices should attract more suppliers and low prices reduce suppliers into a market. Digital disruption fundamentally changes this assumption due to the lower cost base enjoyed by new entrants, due to newer technologies and reduced distribution channels which reduces the price to the customer. The new supplier’s marginal profit and Return On Equity (ROE) is equivalent or higher than the incumbents, at a lower price point.

Before you leave a comment in BOLD saying that better CX through customer centricity and systems thinking is the reason for this – I agree with you. The disruptors come into the market focusing on the customer and building a ground up experience based on today’s points of purchase and new pricing ,while the incumbents are stuck supporting the old distribution.

When your channel is more important than your customer…

I know this sounds either bizarre or obvious, but many incumbents spend more management time on their channel to market than their products. The channel is where the margin sits and where power comes from – it’s their competitive advantage. This distribution focused myopia leads to good decisions (i.e. focus on the ‘fat middle” of your customer base) killing you over time, because the market you see is the market you have created. You cannot see the size of the outside edges of your customer distribution curve.

False quality signals

Incumbents often limit access to their channels using a “quality” argument. This quality is either legislated, supplier power driven or decided by management. The decisions are focused on the “core customer”, which are often the later adopters or the market segment most serviced by the current offering. It is hard to innovate when you cannot see the problem and have investors screaming for margin improvement.

Walmart, with its “fast, faster, fastest” delivery option is a clear case in this. A complicated offering driven by their internal distribution model limitations rather than trying to build a product for the customer.

Why do incumbents die while their industries boom when they are filled with smart, capable executives?

Some basic examples:

  • Music – there is more music being made today then ever before, and more consumed, and more musicians – but music labels died because they were invested in physical production of music
  • Movie rental?  Blockbuster vs Netflix (selection and long tail vs latest releases focus, physical location & complex late fee structures)
  • Bookstores – remember those? Though Kindle is the real disruptor versus just buying books online (that impact is still coming)
  • Investment Management – financial services industry made up of middlemen is beginning to get a fright. Nutmeg, Motif and a number of other low cost investment managers are gaining traction.
  • Travel was disrupted ages ago (who really uses a travel agent?) but its continuing with accommodation (Airbnb) and transport (Uber/Driverless) as this segment continues to change.

These are industries that are booming, but the traditional middlemen/aggregators are dying, died or starting to have some significant health concerns.

The maths is on the side of the disruptors

A successful digital disruption occurs when there is sufficient momentum in these new distribution models that less than 2% of industry spend moves into these new channels (Google, Amazon, Netflix, Uber, Transferwise, AirBnB all became market disruptors at a fraction of market share, getting free PR that further fuelled their growth). While the percentage may seem small, it is enough to create a significant competitive force in any sizeable market. Disruptors attract far cheaper capital than incumbents, giving them an incentive to grow and no fear of destroying established value.

What is also interesting is that this 2% may not have been traditionally served market by the industry i.e. unmet demand or customers with unique (but trending) usage patterns. AirBnB is a great example of this, as was Amazon, Netflix, Spotify etc..

Does my middle look fat in these jeans?

This is where the focus on the fat middle can really impact incumbents, as they are focusing on a limited audience view led by the products they sell, the channel that they have etc. versus a larger market opportunity – which they literally cannot see from where they are.

Who is prone to digital disruption?

Large industries with convoluted value chains based on distribution, versus the quality of the end product are most at risk. At its core, the internet has changed a couple of fundamental elements:

  1. the product/service is now delivered digitally – this means that different things are good/bad in its design versus previous models of product/service delivery.
  2. high margin value chains:- where there is a lot more money in the value chain versus in the creation of the product/service, keep an eye out for disruption
  3. legislative barriers to entry i.e. restrict competition to manage “quality” – i could write a novella on the myth of legislated quality, but I won’t. These industries have often become legislated to keep competitors out rather than make customers happy.

What do you do as an incumbent?

Transformation is often undertaken as an inward gazing exercise, which is not a terrible approach, especially if you can impact your price point and distribution chain… but a more challenging approach is to find the edges of your customer base and start building products that will meet their need. It’s a very hard ROI discussion to have, and I have personally killed a number of these projects when i was on the side of the incumbent figuring out transformation strategies – so i think the complexity of doing this is under-rated.  Even if you kill the projects at the end, looking at new customers is highly valuable as it gives you ideas into what is coming, versus focusing only on what you have.

Enough rambling from me. Always curious as to what other people think, so please share your thoughts…

*Price does not mean cheap, price speaks to the magic mix between perception and quality that creates “value” in a consumers mind.

By Nevo Hadas – Nevo is the Founding Partner of &Innovation, now DYDX