If you seek innovation, invest in experience design

Innovation is one of the biggest buzzwords of our time (at one SXSW, it was the word “innovation” was used 650.000 times). It’s first on the agenda for corporates and startups alike, as the proven way to create value, get ahead of competitors, and sustain a company in the long-run. The speed of innovation has increased at such a fast rate that most traditional industries will be outdated, disrupted and bankrupted if they’re not willing to join the club. But innovation proves difficult for most companies, leaving many CEOs helpless when it comes to bringing it about.

If you seek innovation, invest in experience

There’s a reason why Facebook, Apple, Google and other world-leading companies invest massively in their UX teams. Because they know UX is the secret weapon for growth and for building great products.

UX is the difference between an iPhone and a Nokia Phone, between Google and Altavista or between Airbnb and Craigslist.

In short: UX is the difference between category winners and losers.

What’s the connection between innovation and experience?

Innovation does not mean reinventing the wheel. It refers to adding value by using/improving existing inventions in a new way.

Innovation = Adding Value

Think about it: The iPhone was not first smartphone, Google was not first search engine, Facebook was not first social network, Airbnb not the first place for short-term property rentals. What they had in common: They offered a better experience than other services on the market. The better experience added so much more value that it gave these companies a competitive advantage.

Why is Apple one of the highest valued companies in the world? Because it makes incredibly delightful products that both a 9-month old and 98-year old can easily use.

Good User experience is not a nice to have but must have.

Again, Apple did not invent the smartphone or tablet. But it significantly improved the experience: how it looks, how easy it is to use.

“Apple proved that beauty not only works. It sells. By marrying design and technology, Apple evolved from a niche brand for hobbyists into one of most valuable companies ever.” Says Mikael Cho, Founder & CEO of unsplash.

After Apple’s success, many companies followed suit and levelled up on design and experience.

Image Cred Mikael Cho
Image Cred Mikael Cho

Innovation pays off as the images above demonstrate.

The first mover in innovation reaps the most benefits: Most great innovation gets emulated and copied, however, the followers hardly ever manage to catch up to the usability, perception and margins of the innovator — Apple is a great example for this. Additionally, being the second mover can be a very costly business. Samsung had to pay $1bn to Apple for copying the patented iPhone design.

To make a great innovation you don’t have to reinvent the wheel

Airbnb is another great example for innovation. Even though it was not the first rental site, it significantly improved the user experience by taking out painful uncertainty that comes with renting your flat to an absolute stranger via the internet — or vice versa, renting from a stranger. By adding reviews to the experience, it created the most trusted experience for any rental site on the planet, turning it into a $30bn company.

Image Cred: Escape Your Desk Job

Google wasn’t the first search engine either, but it created trust through an advanced linking mechanism that could recognize the validity of a source based on how often it had been linked to. Here, Google also did not reinvent the wheel, but improved the experience through increased trust and accuracy of the results.

Equally, Facebook was not the first social network — Myspace had been running much longer. However, by using the real identities of users and initially restricting it to Ivy League universities, it gave the experience a new meaning and purpose — suddenly it went from unclearly “chatting with strangers on the internet” to “staying in touch with friends and keeping abreast of what’s going on in my network”. This created a radically improved experience, with the innovation being the reality of the user, rather than a cyber-alter ego.

All of the above companies had one thing in common:

They were innovating by design, not accidentally.

They all took an existing invention, to which they added value by improving the customer experience. This is what we call Experience Design or User Experience (UX).

If you look at the market overall, the companies that take experience design seriously and invest in it have outperformed S&P by 228% over a 10 year horizon.

The Future of design survey 2016 by NEA, one of the largest VCs in the world, asked 400 companies, including eight unicorns (i.e. companies valued over $1bn) about their design practices: the unicorns unequivocally credit design for their success and what made them as valuable as they are.

Image Cred: NEA The Future of Design Survey 2016

Experience is the next evolution of innovation

“Imagine that. Creating experiences is the next evolution of makers everywhere. Some makers, like Disney, understood this early on and continue to thrive, while others never caught on and went the way of the pterodactyl.

On one side of the UX Spectrum, we have SX (sucky experience or sh*tty, you decide). You know that experience, right? It makes you want to switch banks, exercise your Twitter power when your gym overcharges you again, or scream at your (once) favorite laptop as it eats your data away.

On the other side of the UX Spectrum, we have HX (human experience). Because a more human experience means a product is some combination of useful, beneficial, convenient, fast, worthwhile, easy, entertaining, and memorable for a user” says Paul Campillo of Typeform.

Image Cred: Paul Campillo of Typeform

Bad experience is costing real money

Jared Spool famously tells the story about the $300million button. It stems from his work for a large e-commerce company, where he gained an additional $300m in revenue from a simple change in the registration process for a user that wants to buy, which before prevented a significant amount of users from completing the purchase. 300 Million Dollars — Every Year!

Joseph the Gar, UX recruiter at Zalando, gives an example of UX for grocery stores: “The User Experience designer should identify that in fact my Grandpa exists, and they need to be designing their new grocery service for 90 year olds — at £320bn a year, the over-50s now account for around 47% of all UK consumer spending (according to research from Saga and the Centre for Economic and Business Research.)”

Another example of bad UX is booking.com. The website navigation and way to look for hotels is clunky. At the moment, bad UX has not stopped users from using the site — simply because booking.com is specialized in the biggest choice at the lowest prices. “But how long will it take for another company to come along with a beautiful and consistently designed product that offers me the same price or better? Not long at all… When you can’t differentiate on price, all you have left is experience. Companies are starting to get it” says Andrew Doherty, UX and Product Designer at Google.

We are in the age of experience. With the same offering and the same prices, the best experience design will win.

So what does it take to innovate by experience design?

Adding value by improving experience

To re-think experience by adding value to an existing process, product or service requires a certain mindset. A mindset focused on design and customer centricity.

A UX mindset is a mindset focused on design and customer centricity.

Such a mindset does not come out of the blue. It results from an intentionally designed interplay of investment, hiring, organizational structure and culture. Typically, this means the leadership promotes a User Driven Design Culture, and invests in the right skills and mindset from the bottom of the organization.

In a UX-Led organization, EVERYBODY thinks about the user design, not just designers or market researchers.

Jeff Bezos, CEO of Amazon, funded customer experience over advertising 100:0 in the first year and continues to invest heavily on optimizing the website user experience.

In NEA’s “The Future of Design Study 2016”, design mature companies have as high as a 1:2 ratio of designers to engineers.

Image Cred: NEA The Future of Design Survey 2016

It also takes significant efforts on part of the organizations to build an organizational structure and culture that encourages and supports customer centered thinking and action at every level. Yes, that’s requires smart organizational design and iteration, but it does really pay off!

How to create a great experience?

“The best user experience is the one the user doesn’t notice. It appears smooth and simple on the surface, but hundreds of crucial design decisions have been made to guide, entertain and prevent trouble” says Danny Halarewitch, Founder and CEO of Lemonstand

Image Cred: UX Mag

An example of such simple, delightful design according to Steve Tengler of UX Magazine is the “Auto Liftgate. Ever had your hands full of groceries, firewood, baseball equipment or … well … you name it. Of course you have! And you cannot call out to Hal to open the exterior portal, so instead you fumble, you rearrange, you fumble some more, and eventually you have to put everything down. This system allows you to stick your foot under the rear bumper and, voila, the liftgate lifts itself.”

UX Skills

This may sound simple, but UX takes real understanding of the user’s behavior, needs, and motivations. To be exact, it takes all the following:

  • Need to understand your user/ validate your hypothesis/ find out behavior → research/ usability testing/ persona
  • Improve the experience journey, end-to-end, including all touchpoints→ UX strategy
  • Compelling content → Content strategy & Information Architecture (IA)
  • Make the product engaging and intuitive → UI/ wire framing/ prototyping / design
  • Know how to constantly iterate / improve / define pinpoints / serve customer better → conversion rate optimization / analysis, BI, metrics, iteration, MVP, accessibility, heat mapping, etc.

All these skills are embodied by the UX designer → hence it’s a great time to be a UXer!

UX is a movement, a way forward, a vision. UX has applications in every industry UX should be the new superheroes or secret weapons of organizations looking to grow

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