Agencies' Big Problem: Smarter Clients

Now that I’ve been in an in-house role at Financial Engines for a little while after many years of consulting, I’ve had a chance to reflect a bit on the changing needs that corporate clients have of the design and innovation agencies they work with. (For the sake of expediency I’ll sidestep the emotions around consultancy vs agency vs firm vs studio and just use agency as a generic term). A significant shift has taken place which many agencies have not yet fully realized or capitalized upon, or recognized the threat it poses if they resist it.

It boils down to this: agencies’ clients are smarter, better, more sophisticated than they used to be, even compared to just a few years ago. It used to be that capabilities like ethnographic research, insight and framework generation, analysis of competitive and analogous products/services/experiences, customer journey mapping, persona creation, rapid ideation and prototyping, and the other stalwarts of agency work, were fairly exotic to most clients. Or if they weren’t exotic, they were at least not given enough time and attention. That’s not the case today.

The main question for clients today is: Can an agency significantly move the state of the art forward for our organization? This is much, much harder to achieve than in the past, and I don’t think agencies have quite adapted to this new reality.

There are several trends at work here: 

Expertise Parity

The methods of design, customer research and innovation have become widespread and largely accepted. Through books, the web, magazines, conferences, seminars, and old-fashioned people movement (myself and almost everyone I know who’s left a consultancy recently has gone to an in-house role), agencies no longer have a lock on the cutting edge of knowledge and methods.

Ideas are No Longer the Coin of the Realm

What I found over the last ten years was that clients had less and less need for more ideas or more insights into customers. If anything, they were over-run with these already and therefore lacked focus and quality. But ideas and insights are exactly the things that agencies have historically promised and built their staffing and practices around. There is an implication, spoken or unspoken, that by working with an agency a silver-bullet idea or customer insight will emerge that will be a total game-changer. That used to be quite easy to achieve, but it only rarely happens today, simply because the bar is so much higher and the client has so many ideas in play already.

Instead what many companies want are ways to prioritize, filter and roadmap product/service concepts, identify rationales for action, frameworks for making sense of the world, and then internal awareness and alignment around those. They need better glue, not more things for the glue to hold together. Today, know-why is more important than know-how.

Getting Things Done

This gets to the issue of seeing things through to market. Especially when dealing with holistic user experience design, it requires a great deal of organizational wrangling and collaboration to bring end-to-end customer journeys and multi-device/channel experiences out to the world. There are so many moving parts and so many things that can go awry from initial concept to delivered experience that it’s impossible for someone on the outside to effectively and cost-efficiently manage it.

I think this is a big part of why myself and so many other people I know have gone in-house: the problems that need to be solved to do great user experience and design work now need to be tackled from the inside.

Additionally, corporate organizations have become more collaborative and less hierarchical (though not as flat as small start-ups or agencies themselves), and this means that more people on the client side need to be involved throughout a project. This puts a major dent in the usual agency fat-free timeline, resourcing allocation, and therefore cost structure.

Many agencies are already providing this level of expertise and service, but only for their largest, highest-billing top-tier clients that get their best staff and the most hands-on relationships. But clients of all sizes and types are going to be seeking this level of quality and engagement. Can agencies scale to meet the challenge?

Apple Isn't Being Paranoid Enough

Image: Business InsiderThis week sees major announcements from Google and Microsoft, with Apple’s iPad Mini having launched just last week. It’s fun when you get to see competing business models tested side by side like this. As analyst Chetan Sharma has put it:

Apple’s goal is to commoditize the software, Microsoft’s goal is to commoditize the hardware, Google - both

— chetansharma (@chetansharma) June 7, 2011

This article at Tech Crunch about Apple not “Fighting Down” (i.e. keeping its prices/margins high and not getting caught up in the low-ball game) started a conversation at work that I’ll expand on here. While I agree that Apple is not (yet) on a race to the bottom, I have a slightly different take on it – I think Apple is not being paranoid enough.

By sheer coincidence I wrote on my cube whiteboard this morning a quote from (I think) Tim O’Reilly:

“Do you want to protect your future from your past, or your past from your future?”

With the iPad Mini and the iPhone 5, Apple is showing that it is more worried about protecting its past from the future at the moment. I believe this is a very dangerous posture for Apple, especially if it keeps it up for long. Sure, they’re sitting fat and happy right now, and it’s easy to project a straight line into the future of unbridled growth and prosperity. But there are enough warning signs out there that make me think they are in the midst of a Wiley Coyote moment - off the cliff but still running and not aware yet that a fall is inevitable.

I know many will think I’m crazy for saying that. Maybe I am. Maybe I will be proved wrong - I certainly don’t wish Apple ill will. The iPad continues to hugely dominate its market, and I don’t think the fall is going to happen in a few months. But, but… 

In a different context not so long ago, “Fighting down” is exactly what Apple did with iPods. Fairly soon after the expensive iPods had been around, the Shuffle and then the Nano were launched. Why? To create a firebreak against low-end competitors. The Shuffle went in to the market with such a low price (despite being very feature poor) that it essentially stifled the competition.

The mp3 player market is largely done now, but Apple never relinquished dominance due to their willingness to cover all the bases. They have taken the opposite tack with the iPhone - pretty much just one model at a time, one form factor, and price points that start high and go higher. They have made a lot of money with it for sure, but at the same time Android has taken the majority of the market. When you’re in this for an ecosystem play, that’s not a great place to be in the long run.

But iPods are relatively simple devices that are relatively easy to replicate (compared to smartphones and tablets, with all their radios, touch interfaces, OSes, etc.). The complexity of the iPad and iPhone makes it harder for others to create a dramatically lower-end strategy. So maybe Apple is being smart about not giving in to the low price war. Right now, late 2012, that is probably true. But price pressures are increasing, and coming out with an iPad Mini that is $100+ above the competition and with a screen that’s 2 years out of date (and with a design that looks weirdly wide into the bargain) does not smell of confidence.

Let’s bring it back to business model. Apple makes its money with hardware. Customers like hardware. They like good user experiences, and they like ecosystems that work smoothly and comprehensively. But what if they can buy into good quality experiences and ecosystems and get hardware that’s just about as good as Apple’s, for half the price? That’s the downside scenario for Apple. And it’s happened over and over again the in tech industry, from Macs (vs PCs) to Tivo (vs Motorola DVRs from cable providers); or Sony TVs vs Chinese off-brand TVs.

People say they like Apple’s industrial design, but actions speak louder than words, and at the end of the day, they mostly cover them with cases that lack all of Apple’s oh-so-serious design approach and sub-millimeter attention to detail. People mostly really care about what’s on the screen. Can Apple maintain its lead in user experience and ecosystems (which deliver what’s on the screen), and still keep its hardware margins over the next 2-3 years? I’m skeptical.

Leuchtturm 1917 Notebooks

Even though I’m a heavy Evernote user, I still like writing things down by hand, especially in meetings, where I find it’s less distracting. Financial Engines, where I work, has a culture where most “notebooks” brought to meetings are made of paper, not plastic and circuit boards, which actually helps meeting productivity immensely.

I’m promiscuous when it comes to notebooks — I’ve rarely bought the same one twice, always searching for the next best thing. Moleskine’s are alright, but I find their paper quality not that great, and I just like to be different. Now I think I have found a notebook I can stick with for a while: the Leuchtturm 1917 Medium. (Don’t ask me how to pronounce it…)

I bought my first one about six months ago, and just purchased my second one now that the first is almost finished (both bought from European Paper, one of the few companies in the US that stocks them).

Mine are both white, which is a refreshing change from the standard black (and looks great with my white HTC One X, and my silver MacBook Air!), plus it’s easier to see in a bag. It has the standard expandable pocket in the back, elastic strap to keep it closed, and bookmarking ribbon (also color coordinated). These have all held up well.

I find the light color, spacing and thin weight of the page rules exactly right. There’s very little show-through from the opposite side of a page, no ink bleed through (at least with what I use it for), and the paper is a nice cream color (I don’t like the more sterile blue/purple tint of Rhodia, for example). The book folds completely flat with no problem, and the spine is still in great shape. The pages are numbered (unlike a Moleskine) if that matters to you, and there is a page at the front to create a table of contents to reference specific page numbers. The 1917 also comes in dot pattern and blank pages.

The cover has just the right pliability/rigidity balance, and has rounded corners to avoid damage. The front is completely blank, and the back has a discrete embossed logo. Included with the notebook are several goodies, including colored stickers to label pages or sections.

I prefer to keep a pen bound to my notebooks, something I always have been frustrated with Moleskines. Leuchtturm sells a nice elastic loop that adhesive attaches to the inside cover. You could use this on any notebook of course.

It’s not worlds different than a Moleskine (there are other notebooks out there that really try to be iconoclastic), but I would put it like this: Moleskine is VW, Leuchtturm is Audi. Pretty similar, both good and solid, Leuchtturm just has more polish.

I definitely give this my stamp of approval, but you can find much more in-depth reviews with a quick Google search.

Workshop on Creativity in Mongolia

I recently had an opportunity to do a workshop for the American University of Mongolia in Mongolia’s captial, Ulaanbaatar. The workshop was about creative thinking, innovation, and customer research, and it went very well. The participants did a great job with the activities, and the final one - which involved them acting out a customer experience that they had invented over the course of the 2-day workshop - they attacked with gusto (and hilarity).

Many thanks to Muggie, Bujin and the rest of the team at AUM for their hospitality, and to the workshop for participants for making it a great experience!

Here are some photos from the session:

Remembering Bill Moggridge, 1943-2012

I was saddened this morning to hear of the death of Bill Moggridge, at age 69, after what I understand was a fight with lung cancer. Details are scant, but the Cooper Hewitt, where he had been serving as director since 2010, has a memorium.

It’s truly a shame that Bill’s tenure at Cooper Hewitt only lasted two years. There are few people who have had such a profound effect on the field of design, combined with his graceful and generous personality that made him one of its premier ambassadors.

I was fortunate to have met Bill a number of times, and he was unfailingly gracious, kind, and generous with his time, even to people that he barely knew. I also interned at the San Francisco-based forerunner of IDEO, ID-Two, when Bill was still actively engaged with projects.

Bill was a true pioneer in the field of design. He created the first laptop computer, the GRiD Compass, the first portable to use the notebook architecture that we now take for granted. But beyond individual products I see Bill’s real legacy as the growth of the sphere of design, encompassing interaction design, user research, and design strategy.

In the late 80’s and early 90’s, design for screen-based interfaces was in a nascent state (interactive CD-ROMs anyone?), and physical and digital design were largely treated as separate activities. Bill was one of the first to treat them as different aspects of the same fundamental activity and end-goal. He also saw the role of user research at the front end of the design process, as a complement to the more narrowly focused ergonomics and usability testing that existed at the time.

This growth in scope necessitated different skills, larger teams, and by extension larger firms. IDEO was the first of the super-sized design firms. In 1990 when I was interning at ID Two in San Francisco, it had less than 20 people, and it was considered a large firm at the time. Most design firms of that era were small boutique operations, sometimes just a couple of people, for example Taylor and Chu (two ex ID-Two guys who I also interned with) and Montgomery-Pfeifer (two ex-frog guys). In those days, industrial design could be done as a relatively specialty, though there were tides forcing even the small firms to grow in breadth of capabilities.

When I was there, the merger of Moggridge Associates in London, ID Two, David Kelley Design, and Matrix Design was starting to happen. IDEO had been proposed as the name, not to universal acclaim as I recall, and famed graphic designer Paul Rand had been hired to create the identity. I recall a fax (this was pre email days) sent by a mischevious anonymous person at Mogg Assoc to ID Two pretending to be from Rand. It showed several napkin sketches of Rand’s “proposed” logos, each re-treading one of Rand’s iconic older designs - IDEO has AT&T death star, IDEO with IBM stripes… It was furtively passed around with chuckles.

While the merger seemed a bit of a longshot at the time, clearly IDEO has become one of the largest and most prominent design firms in the world. And of course it is a fierce competitor of my former firm, frog design. The two firms have evolved in somewhat different directions, but continue to compete strongly and share a good mutual respect.

No firm grows without talent, and Bill had a great eye for it. In that small group of people at ID Two were:

• Tim Brown, now IDEO’s CEO. At the time he was on a year exchange from Mogg Assoc (as it was often shortened to) in London. Tim was also a teacher of mine at CCA when I was an ID student there (when it was still called CCAC).
• Naoto Fukasawa, the celebrated industrial designer, now on his own. Naoto at the time had just moved to the US from Japan and barely spoke English, but was clearly a naturally very gifted designer.
• Bill Verplank, one of the pioneers of design research and usability testing
• Jane Fulton Suri, another pioneer of design research, and still with IDEO.
• Tim Parsey, erstwhile design leader at Motorola, Mattel and now at Yahoo!

There were probably others too, I just didn’t cross paths with them.

At this time, Bill was transitioning from his role of being a designer to a builder of design teams, as he describes in the Cooper Hewitt piece. There’s one example of this that remains particularly vivid for me. A major project had just wrapped up and at the weekly staff meeting Bill talked about it with the rest of the staff. As I recall, it was one of ID Two’s first project in the emerging world of user interface design (rather than industrial design), and as such represented shift in emphasis, and was clearly in line with Bill’s broader view of design. In particular, he lauded the work of the woman (unfortunately I can’t remember her name) who had done much of the design work in ways that were authentic, heartfelt, and emphatic.

As a young person new to the work world, I had a startling realization that this was how to effectively praise people and help move them along their careers, and how to help build a team in a time of change.

Closer to home, he also wrote a very nice letter of recommendation for my wife, Leslie Speer, for her tenure application in the industrial design program at San Jose State.

My condolences to his family, and to everyone who knew and worked with him much more than I did.