Human Centered Business Design

Whats the “magic word” ?
A close friend once asked me, “Is there a formula to make money?”, “What is it that successful business people know, that I don’t?”, “What’s the magic word to make my business successful?”. For some of you these questions may seem naive, however, for a would-be entrepreneur or someone stuck in a downward spiral in a business, these questions are always on one’s mind. I won’t try to answer these questions, no, that should be left to the Reed Hastings, Jeff Bezos and the Bloombergs of the world. I will however, try to synthesize the patterns that I’m observing between the successful entrepreneurs I’ve read about, those I’ve briefly met and those that I have had the privilege of learning from in classrooms over the years.

“Demand Creators don’t rely on assumptions, intuition, or ‘common sense’. They dig for evidence and go wherever it leads – often to the unexpected places where demand is hiding”

– Adiran J. Slywotzky, “Demand”

Human Centered what?

While I was studying how to design products with a human centered approach, I wondered how can such a paradigm be followed in a big, opaque, hierarchical, process centric organization? At that point, my concern was only with the “product” and not the “business” in its entirety. How do you understand the end-userspurchasers orinfluencers of your product in an organization that locks away its designers in silos away from them. The short answer, you can’t. You can hope to get a representation of these customers, lets call it the “Average customer“, in the form of high level personas, but you’ll most likely miss out on the variations in the customer behaviour, which in the long run can make or break a product.

It’s a Thought Process change..

Six Pillars of Demand - Mind Map Style

                              Six Pillars of Demand – Mind Map Style


It’s really difficult the get the bigger picture by focussing only on the product/service; You need to look at the business in its entirety to really understand the various cogs that make the system run, or jam up. You need to put on different “lenses” (like in the movie National Treasure, oh I wish I could get my hands on one of those). Slywotzky’s “Demand” attempts to provide those lenses in the form of the “Six Pillars of Demand” – Magnetism, Hassle Maps, Backstory, Trigger(s), Trajectory and Variation. It’s important to understand that this isn’t an attempt by the author to pull meaning out of thin air, or provide that winning formula that will work for anything in the world out there; In fact, the stories he tells to explain each of these lenses, show how circumstantial and unique each one of those businesses are, and yet there seems to be a common theme between them, their customer centric thought process, almost obsessiveness towards perfection and unyielding desire for improvement.

Being “Effectual”…

How an effectual entrepreneur thinks

                            How an effectual entrepreneur thinks

I believe that instead of thinking about a formula (the analytic side of your brain), we need to master the thought process of a sculptor, an artist who will try something first and then see how it turns out in retrospect and then try to improve it based on real evidence. In words of David Robinson“Try to experience (it) first, make sense of it later”Netflix is the best example of this; Reed Hastings, wanted to fix his own hassle of forgetting to return a movie rental on time. He had an idea that what if you could simply mail the dvd back to the shop? He went out and tried it by sending a few discs via the US postal service to himself. This lay the foundation for one of the most intriguing use of existing delivery network, and ingenious envelope design. The learning is that if you have an idea on how to fix a hassle, go and try it out with whatever resources that are available at the time, instead of trying to re-invent the wheel to carry your idea forward.

Great. But it won’t work for my business. Will it?
Why not? Is it because your business is really spread out and you feel that spending resources on doing such user research might by an overhead? Read Nespresso’s story, a small product idea, budding inside a business giant. It’s fascinating how they kept trying to find that one “Trigger” that would increase the demand of this niche appliance. It turned out, it wasn’t just one, but several triggers, that needed to be tried and tried again to successfully generate more and more demand.

If you feel that your business does not have an end-user(consumer) for you to conduct research on, there’s always the other businesses that you’re dealing with who become your customer. Then identifying the customers’ customer becomes key. To Take another example, TetraPak, their demand creation strategy is so stealthy, most of us don’t even know that we may be consuming  food packaged by them. Their problem, people in the North American continent did not find the tetrapak milk, or juice products as appealing as their European counterparts did. The reasons are buried in the socio-economic differences, which came down to a simple preference of “refrigerated” vs “fresh” food items. So how do you capture a demand, where the consumers in one part of the world don’t yet understand the benefits. You try to capture the distributer’s (their customer) demand who supply to the retailers (customer’s customer) and finally ends up with the consumer (customer’s customer’s customer).

Yea, but I’m no Steve Jobs!
I don’t believe that one needs to be Steve Jobs, maybe we can’t be. But by looking through these lenses, and keeping the customer at the center of the enterprise will give you the edge over others who are product centric or process centric. Another important factor here is not to try to re-invent the wheel and use what resources are available out in the world.

“One of the lessons Hastings had learned was the importance of using resources available in the outside world to create the backstory needed to support your product, rather than trying to create it all from scratch” – Adiran J. Slywotzky, “Demand”

Conclusion
…is that it can seem very vague, the way entrepreneurs behave when faced with decision points or how they work through those decisions to eventually a successful story. However, if you look closely at each story, at the decision points, and the circumstances, there is ambiguity, but not vagueness (oh yea, there is a difference between the two). And from what I’ve observed so far, entrepreneurs thrive in ambiguity, in fact they seek it out, like not settling for the “average customer” myth and finding out the variations between different customer segments and trying to find ways to serve them.

Every entrepreneur’s story is going to be unique, any this synthesis is just my understanding of demand creations; This understanding is bound to change again someday, but I guess that’s the whole point.

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4 thoughts on “Human Centered Business Design

  1. Whoa, nicely collated. A whole lot of things in there. I like the sculptor’s thought process and ‘experience first’ example. I feel it ties in closely with the ‘experimentation’ skill that Clayton Christensen talks about in ‘Innovator’s DNA’. “Build your lego blocks of experiences” he says.
    But I didn’t get your final stand on customer insight. Would you focus on getting your hypothesis tested through a subset of customers before going all out, or would you go all out based on minimal information since subtle customer variations matter?

    • Oh, I need to add that book to my reading list :).

      Short answer to your question: Yes! 🙂

      Long Answer: It depends.. I wouldn’t attempt to answer that without trying both ways out in the field myself. But hearing from the entrepreneurs I’ve met so far, there seems to be no method to their madness. They just love going all out with minimal information at hand, at times even going to customer with posters and prototypes of products which seem ready, but actually they doesn’t even exist yet!

      • Hey Div, I finally got a chance to read this. Its nicely written and makes good points. I liked the evidence part (available means, possible ends) . However, the average customer bit, I disagree on. This product design is a new product that serves a latent need (not served until now) right? So, if you are the entrepreneur who is launching this new product, your constraints will allow you to target only the ‘average customer’. Its only later, when your product has gained acceptance and won the 1st mover’s advantage, can you go out and serve the minor variations in customer behaviours (that too, only if you feel the need).
        The entrepreneurs whom you met, who succeeded with minimal information, by going all out with a prototype – they did well, yes, probably. However, we need to know the failed stories too right?

      • Hey Gaurav, glad you liked it.

        The funniest thing about product is, that if you’ve thought of that brilliant idea which will fix an unmet need somewhere, you can almost be certain that there are others like you out there, with an idea similar to yours, trying to fix a similar need. Targeting the average customer has been the way for product development since many years, but when you actually study the history of other products and services, there is a hidden pattern there for those gem of successful ones. When you read about Zipcar, Netflix, and others you’ll see that instead of trying to ‘average’ out, they ‘de-average’. They realized that demand varies for different types of customers, and sometimes within the same customer at different circumstances.

        To quote Slywotzki ” The real problem with the myth of the average customer is – Designing a product offer to some archetypal customer is always wasteful. It leads to overage (providing features many individuals don’t want), underage (omitting features that they do want), and sheer inaccuracy (choosing features based on guesswork and approximation rather than reality). “. This isn’t something new, its been done many times before, the only catch is that most of the times we don’t even know that we’re doing it. Reading about Boston Symphony Orchestra, Seattle Opera, Eurostar among other examples made it much more clear, they all had to look for varying demand patterns before they really successful, regardless of the ’1st mover’s advantage’.

        The failed stories are the best stories actually, because theres lots to learn there, and you are absolutely right, we need to know those as well. However, failure can be attributed to many reasons, failing to realize demand variation being one for sure, and some of the entrepreneurs I have met have failed many times before as well.

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