Optimisation is perfecting the formula that goes out of date

June 5, 2017

Optimisation is an investment into reducing innovation. Optimisation reduces costs and gets rid of extraneous factors. But, by streamlining everything, you also diminish the opportunity to improve something, taking away the chance to create the next big thing.

Optimisation’s short term goals put you in a position, where competition develops the next thing, you’re stuck with a highly efficient process for making the last thing.

At the peak of its power, the Ford Motor Company had 48% market share for its model T. However, there was no model to follow. While GM quietly introduced features and styling as arguments for the car, Ford still simply marketed value, a.k.a. price / quality.

Refusing to meet the customers developing demands of the car placed Ford in complicated situation. The operation was incredibly efficient at producing something, that was no longer desirable. And with no back-up plan in place.

Pursuing optimisation and efficiency is admirable, if it is balanced with innovation and customer insight. But when optimisation becomes a technical pursuit, then what should be the real goal of optimisation, delivering greater value to customers, is often lost in translation.

In pursuit of a more efficient process, the question most often asked is “how can we” rather than “should we.” The short term goal of a more time and cost efficient process, looked on only from the perspective of the company, often overlooks the human experience completely.

The human experience requires more than just a functioning product or service. It also requires a sincere acknowledgment, that their custom is valued. As professor Noraki Kano pointed out in 1985, competition for custom depends on three factors:
– hygiene factors – the must have to be even considered;
– linear factors – the more the merrier
– delightful factors – that, which the customer didn’t even know about, but which is the source of loyalty

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Optimisation, by default focuses on hygiene and linear factors and ignores delightful factors.

But what if you did it differently? To paraphrase Steve Jobs, if the software works fast enough, it works like magic. Magic is the essence of delightful factor, because no amount of explaining of how it works will substitute for the experience a customer has the first time trying it out. And, it immediately makes the linear and hygiene factors secondary to the experience.

However, still too many businesses are focused on producing faster, cheaper, more instead of delivering experiences, that people can delight in. This, by default, drives competition on price and features. Competitors will see your offers of price and features and will draw the conclusion, that this is what customers want and follow you with even better price and features. You, of course, have just received confirmation that this is what customers want because your competition is doing it too. Customers, at this point, are obviously going for the cheapest / feature richest version of whatever it is that your selling, because that is what is being offered. However, there is no customer loyalty, and depending on how “sticky” your offer is, a lot of customer churn. Does this sound familiar?

One way to break this cycle is to start focusing on the customer experience, from need to satisfaction, not just the moment of transaction. To take a look at customers’ journeys from their perspective and to understand the context of your product or service in their lives. This requires the addition of empathy to the development process and the uncomfortable method of actually talking to real customers. Preferably one-to-one and in their home or office, not yours. It shouldn’t be a surprise, that while your company may be the biggest in the industry, for your customers you’re just 5 seconds of their day and, in many cases, incidental to something much more important.

Realising the unimportance of your company to your customers will help create the framework for innovation, that creates delightful experiences that exponentially improve customer loyalty. However, that requires understanding what matters to customers, from their perspective. Not to focus only on what the core functions (and difficulties) are for your company.

Consider this: arguably making a car actually work, is difficult. It requires engineers and designers and mechanics and so on. To put 5000 pieces together, so that a person can just get in and drive. It is an expensive and time consuming process. However, it is also just a hygiene factor.

Making the car go faster, drive further, take less gas, have more room: all of these are linear factors.

But having the car remember every driver, both in terms of seat position, climate, music and what flavour of chewing gum they like, that could be a delightful factor. Something people can talk about, to each other. Because they won’t speak about the fact that the car works.

Service design, as a customer centred development method, helps uncover the touchpoints customers have with your company along their journey from need to satisfaction. By involving the same customers in the improvement of the touchpoints that cause problems, can help bring about innovation that is not visible from within the organisation. As Einstein pointed out, “Problems cannot be solved within the framework in which they were created.”

(Note, that today’s delightful factor is tomorrow’s linear factor and next week’s hygiene factor. Don’t rely on research from last year developing products and services for tomorrow.)