Defense Against the Dark Art of Disruption

Woman with Crystal Ball

My first post for 2016 was titled “Is 2016 the Year for Customer-Focused IT?”. The closing line was “If 2016 isn’t the year for customer-focused IT, I wonder just what kind of year it will be for IT?”.

I am so sorry for jinxing so many things for so many people. 🙂

So far, the year has brought us great moments in customer experience like:

  • Google Mic Drop – an automated kiss-off for email (“you meant to hit that button, right?”)
  • Google/Nest and the Resolv home automation hub – retiring a product by bricking it (“it’s just not working; it’s not you, it’s us”)
  • Apple Music – cloud access to your music and freed-up disk space (“nice little music collection you have here, it’d be a shame if you quit paying for access to it”)
  • Evernote’s downsizing – because when the free plan is good enough for too many people, taking away features is the way to get them to pay, right?

Apple, of course, probably won the prize with their “courageous” iPhone 7 rollout:

Using “courage” in such a way was basically a lethal combination of a giant middle finger mixed with a swift kick in the nuts, all wrapped in a seemingly tone-deaf soundbite. This is the kind of stuff critics dream about.

Because Schiller said exactly what he said, he left the company open to not only mockery, but also bolstered a common line of criticism that often gets leveled upon Apple: that they think they know best, and everyone else can hit the road. You can argue that this is a good mentality to have in some cases — the whole “faster horse” thing — but it’s not a savvy move for a company to say this so directly in such a manner.

Apple then continued it’s tradition of “courage” with the new MacBook Pro models.

So, is there a point to all this?

Beyond the obvious, “it’s my site and I’ll snark if I want to”, there’s a very important point. Matt Ballantine captured it perfectly in his post, “Ripe for Disruption”: “You’re less likely to be disrupted if you are in sync with your customers’ view of your value proposition.” His definitive example:

I think that most of the classic cases of organisational extinction through disruption can be framed in this way: Kodak thought their value was in film and cameras. Their customers wanted to capture memories. Kodak missed digital (even though they kind of invented it).

The quote bears repeating with emphasis: “You’re less likely to be disrupted if you are in sync with your customers’ view of your value proposition.” What you think your value proposition is means a whole lot less than your customer’s perception of the value of what you’re delivering. This is a really good way to poison that perception:

Disappointment, betrayal (perception is reality here) are not conducive to a positive customer experience. Customer acquisition is important, but retention is far more important to gaining market share (h/t to Matt Collins). The key to retention is to relate to your customers; understand what they need, then provide that. Having them pay for what’s in your best interest, rather than theirs (hello Kodak), is a much harder sell.

All Aboard the Innovation Band Wagon?

Bandwagon

 

It seems like everyone wants to be an innovator nowadays. Being “digital” is in – never mind what it means, you’ve just got to be “digital”. Being innovative, however, is more than being buzzword-compliant. Being innovative, particularly in a digital sense, means solving problems (for customers, not yourself) in a new way with technology. Being innovative means meeting a need in a sustainable way (eventually you have to make money). Being innovative means understanding your strategy, not just following the latest thing.

Casimir Artmann published a post this week, “Digital is not enough”, outlining Kodak’s failures in the digital photography space. As digital cameras entered the market, Kodak introduced ways to turn film into digital images. Kodak’s move into digital photography (which, ironically, they invented in 1975), coincided with the rise of camera phones. By concentrating more on perpetuating their film product line than their customers’ needs, Kodak wound up chasing the trend and losing out.

Customers’ cash follow products that meet customer needs (even needs that they didn’t know they had).

Sometimes a product or service can meet a need and still fail. A Business Insider article yesterday morning discussed the weakness of the peer-to-peer foreign exchange business model, saying it only works in “fair weather”. In the article, Richard Kimber, CEO of the foreign exchange company OFX Group, observes:

When you’ve got currency moving dramatically one way or the other, what you can have happen is it encourages asymmetric activity. As we saw in Brexit, you had lots and lots of sellers and very few buyers. That can lead to an inability to transact because you simply have all these sellers lined up and no buyers. That’s one of the reasons why the peer-to-peer players opted out of their model during this period of volatility because it wouldn’t have been sustainable.

While Brexit might be the latest event to expose the weakness of the peer-to-peer model, it’s not the first. The Business Insider article referenced another article from January on The Memo that made the same point. Small wonder, the concept of a market maker is a well established component of financial markets.

Disintermediation, cutting out the “middleman”, is only innovative when the “middleman” is, or can be made, superfluous.

Blindly following a trend can be another innovation anti-pattern. In an article for the Wharton Business School, “Rethinking Retail: When Location Is a Liability”, the authors discussed the pressures on brick and mortar retailers and the need to be “Digital-first”. The following was recommended:

  1. Identify some of your common habits and perspectives about how the retail sector should function, including guiding principles, time and capital allocation patterns, primary skills and capabilities, and the key metrics and outcomes that you track.
  2. Uncover the core beliefs about retailing that motivate your behaviors, and are the priorities of your firm and board. This step usually takes some ongoing reflection and added perspective from your peers. Industry best practices likely influence your thinking greatly.
  3. Invert your core beliefs about retailing and consider the implications for your firm and board. There are many possible inversions in each instance. For example, all retailers should ask themselves, ‘Is digital our first priority? How about our customer network — do we put them in front of merchandise and do we have an entire department dedicated to mobilizing them?’
  4. Extrapolate what implications these new core beliefs, and the various ripple effects, would have for your organization and board. Observe what is happening in your industry and, more broadly, how different core beliefs might help you get ahead of digital disruption by companies like Amazon.
  5. Act on your new retail core beliefs (preferably with digital as the center) by sharing them broadly with your customers, employees, suppliers and investors. Purposely changing your business actions, particularly when it comes to time and capital allocation, is an important part of the process and helps reinforce the changes in mental models you are trying to achieve.

Note the generous usage of “your” (retailer) instead of “their” (customer). Sharing “…your new retail core beliefs (preferably with digital as the center)…” with your customers will only be fruitful if those new beliefs align with those the customer has or can be convinced to adopt. Retail is a very broad segment and a very large part of it needs to be digital. That being said, over-focusing on it carries risk as well. Convenience stores, for example, catering to a “we’re out and need it now” market, is unlikely to benefit from a digital-first strategy in the same way big-box retailers might. Not having a one-size-fits-all strategy is why Amazon is opening physical stores.

We don’t drive customer behavior. We provide opportunities that hopefully makes it more like for them to choose us.

Innovation doesn’t come from a recipe. Digital isn’t the magic secret sauce for everything. Change occurs, but at different speeds in different areas. The future is not evenly distributed. As Joanna Young observed in “Obsolescence: Take With Grain Of Salt”:

I recall clearly in the mid-1990s hearing an executive say “by the year 2000, we will be paperless.” I signed, with a pen, four approval forms just today. Has technology failed us? No. The technology exists to make mailboxes obsolete and signatures purely ceremonial. However the willingness to change behavior and ergo retire old methods is up to humans, not technology.

Innovation is significant positive change, an improvement in our customers’ lives, not a recipe.

Nest and Revolv – Smart Devices, Not so Smart Moves

I’ve made another guest appearance on Architecture Corner. In episode 39, “New and Obsolete”, Greger Wikstrand, Casimir Artmann and I discuss product lifetimes and the Internet of Things.

How could Nest have better handled the end of life of the Revolv device?

Google’s Parent Company is Stirring Up a Hornet’s Nest

On May 15th, my house will stop working. My landscape lighting will stop turning on and off, my security lights will stop reacting to motion, and my home made vacation burglar deterrent will stop working. This is a conscious intentional decision by Google/Nest.

To be clear, they are not simply ceasing to support the product, rather they are advising customers that on May 15th a container of hummus will actually be infinitely more useful than the Revolv hub.

Google is intentionally bricking hardware that I own.

Google, even before it morphed into Alphabet, has a long history of killing of products. While this is annoying when the product is a free online service (yes, I still miss Reader), the impending demise of the Revolv home automation hub raises some interesting questions. Arlo Gilbert, CEO of Televera (which produces medical monitoring software), asked in the Medium article referenced above:

Which hardware will Google choose to intentionally brick next? If they stop supporting Android will they decide that the day after the last warranty expires that your phone will go dark? Is your Nexus device safe? What about your Nest fire/smoke alarm? What about your Dropcam? What about your Chromecast device? Will Google/Nest endanger your family at some point?
All of those devices have software and hardware that are inextricably linked. When does an expired warranty become a right to disable core device functionality?

According to an article on Business Insider, Nest bought Revolv a few months after being purchased by Google. Since the purchase was aimed at acquiring Revolv’s talent, Nest quit selling the $300 Revolv devices, but they did continue to support them. That, however, will end on May 15th according to a recent announcement.

Google’s choice “…to intentionally brick…” this product is important for several reasons. There may be some legal ramifications (as reported in Business Insider, the devices were advertised with a “lifetime subscription”). Gilbert’s question about what happens to the devices he listed should make people (consumers and producers) think.

I agree with Christina Warren’s assertion in her post on Mashable that it’s unrealistic to expect companies to support products forever, particularly where the hardware and its supporting software services have become very tightly coupled. However, producers need to consider the cost to their reputation/good will when they take actions like this. One option floated on Vox:

Of course, it might be a waste of resources for Nest to support a product that only a small number of people are using. But if there aren’t many users left, that means it wouldn’t cost Nest very much to compensate the few remaining users — either by refunding the purchase price or offering to send users a similar product. Instead, Nest appears to be simply leaving them out of luck.

Generating fear, uncertainty, and doubt (FUD) is an ethically questionable tactic when applied to your competitors’ products. When you generate FUD about your own products, then it’s your judgement that comes into question. One way to throw cold water on the excitement around the Internet of Things (IOT) is to unintentionally or cavalierly create that doubt in the minds of consumers. When you’re working on a really big IOT product, something like an autonomous car, do you really want people questioning your commitment to standing behind your products?

Twitter, Timelines, and the Open/Closed Principle

Consider this Tweet for a moment. I’ll be coming back to it at the end.

In my last post, I brought up Twitter’s rumored changes to the timeline feature as a poor example of customer awareness in connection with an attempt to innovate. The initial rumor set off a storm of protest that brought out CEO Jack Dorsey to deny (sort of) that the timeline will change. Today, the other shoe dropped, the timeline will change (sort of):

Essentially, it will be a re-implementation of the “While You Were Away” feature with an opt-out:

In the “coming weeks,” Twitter will turn on the feature for users by default, and put a notification in the timeline when it does, Haq says. But even then, you’ll be able to turn it off again.

Of course, Twitter’s expectation is that most people will like the timeline tweak—or at least not hate it—once they’re exposed to it. “We have the opt-out because we also prioritize user control,” Haq says. “But we do encourage people to give it a chance.”

So, what does this have to do with the Open/Closed Principle? The Wikipedia article for it contains a quote from Bertrand Meyer’s Object-Oriented Software Construction (emphasis is mine):

A class is closed, since it may be compiled, stored in a library, baselined, and used by client classes. But it is also open, since any new class may use it as parent, adding new features. When a descendant class is defined, there is no need to change the original or to disturb its clients.

Just as change to the code of class may disturb its clients, change to user experience of a product may disturb the clientele. Sometimes extension won’t work and change must take place. As it turns out, the timeline has been extended with optional behavior rather than changed unconditionally as was rumored.

Some thoughts:

  • Twitter isn’t the only social media application out there with a timeline for updates. Perhaps that chronological timeline (among other features) provides some value to the user base?
  • Assuming that value and the risk of upsetting the user base if that value was taken away, wouldn’t it have been wise to communicate in advance? Wouldn’t it have been even wiser to communicate when the rumor hit?

Innovation will involve change, but not all change is necessarily innovative. Understanding customer wants and needs is a good first step to identifying risky changes to user experience (whether real or just perceived). I’d argue this is even more pronounced when you consider that Twitter’s user base is really its product. Twitter’s customers are advertisers and data consumers who want and need an engaged, growing user base to view promoted Tweets and generate usage data.

Returning to the Tweet at the beginning of this post. Considering the accuracy of that recommendation, would it be reasonable to think turning over your timeline to their algorithms might degrade your user experience?

Cause and Effect – Cargo Cults and Carts Before Horses

Sometimes our love of shortcuts can make us really stupid. Take, for example, the idea of “Fail Fast”. As Jeff Sussna observed in his post “Rethinking Failure”, “Suddenly failure is all the rage.” He also noted:

By itself, failure is anything but good. Making the same mistake over and over again doesn’t help anyone. Failure leads to success when I learn from it by changing my behavior or understanding in response to it. Even then, it’s impossible to guarantee that my response will in fact lead to success. The validity of any given response can only be evaluated in hindsight.

Dan McClure, in “Why the “Fail Fast” Philosophy Doesn’t Work”, agreed:

If your only strategy for exploring the unknown is to pick up rocks and look underneath, then the more rocks you turn over the better. The problem is that for real world innovations, test and reject doesn’t scale well. For disruptive ideas with the potential to make a difference in the market there are lots and lots of rocks.

The value in “Fail Fast” lies in the “Fast” part; there’s no magic in the “Fail”. If you’re going to fail, finding out about it sooner, rather than later, is less costly. Less costly, however, is a far cry from best. Succeeding obviously works much better than failing fast, meaning that methods which allow you to evaluate without incurring the time, pain, and expense of a failure are a better choice when available.

Another example of this phenomenon is what Matt Balantine recently referred to as “investor-centric” development:

That, of course, creates an interesting rabbit hole – investors chasing products that will be “hot” and products designed to appeal to investors rather than customers (which would result in the product becoming “hot”). Matt’s comment from his post “What if the answer isn’t software?” applies, “I’ve no doubt that we are seeing real issues and opportunities being ignored in the pursuit of the rainbow-pooping unicorns.”

Yet another example of magical thinking is via believing in the “Great Man Theory”. People like Steve Jobs and Elon Musk have achieved great things, but as a result of what they did, not who they are. Divorced from their context, it’s a hard sell to argue that they would be equally successful.

Effectiveness is more likely to come from systems thinking than magical thinking. Understanding cause and effect as well as interrelationships and context makes the difference between rational decision-making and superstition.

#ShadowSocialMedia or Why Won’t People Use the Product the Way They’re Supposed to

Scott Berkun dislikes the way people are using images to bypass Twitter’s 140 character limit:

His point is very valid, but:

Which is the issue. Sometimes there’s a need to go beyond that limit. Sure, you can chunk your thoughts up across multiple tweets, but users find it burdensome to respect Twitter’s constraint on the amount of text per tweet. Constrained customers, assuming they stick with a product, tend to come up with “creative” solutions to that product’s shortcomings that reflect what they value. The customers’ values may well conflict with the developers’. When “conflict” and “customer” are in the same sentence, there’s generally a problem..

Berkun’s response to @honatwork‘s rebuttal nearly captures the issue:

I say “nearly”, because Twitter was built long before 2015. The problem is that it’s 2015 and Twitter has not evolved to meet a need that clearly exists.

In the IT world, it’s common to hear terms like “Shadow IT” or “Rogue IT”. Both refer to users (i.e. customers) going beyond the pale of approved tools and techniques to meet a need. This poses a problem for IT in that the customer’s solution may not incorporate things that IT values and retrofitting those concerns later is far more difficult. Taking a “products, not projects” approach can minimize the need for customer “creativity”, for in-house IT and external providers.

Trying to hold back the tide just won’t work, because the purpose of the system is to meet the customers’ needs, not respect the designers’ intent.