http://smartexperience.org/
Getting Good Designs Built
Victor Lombardi
June 26, 2007
Sponsored by
http://www.ixda.org/

“The Promising Syllabus”
I promise to help you do something you probably couldn’t
do before, but…
We all need to take responsibility for our own learning
1. Explain what you want to know
2. Ask clarifying questions
3. Tell us about your experience
Agreed?
Great, let’s get started…

When design is the strategy
\"[the iPhone is pushing operators] to meet its design
vision rather than the other way around and refuses to be
tied to requirements that befuddle the UI and lead to an
incoherent user experience. Stan Sigman (CEO of
Cingular) revealed that Cingular had entered into a
contractual agreement with Apple two years ago without
ever seeing the product, based purely on the strength of
the design vision.”
http://visionmobile.com/blog/2007/01/iphone-delivers-a-genuinely-disruptive-ui/

For the rest of us…
\"I understand that we must compromise with the larger
forces of business that buffet us, but that doesn't mean
we have to become quislings. Just because they force ill-
chosen compromises upon us does not mean that we are
required to justify them as being necessary or even
adequate.\"
– Alan Cooper, IxDA email discussion, not too long ago

My framework…
Discover the Align your
Know Understand
company’s customer need
business your
competitive with company
fundamentals context
advantage priorities

Discover the Align your
Know Understand
company’s customer need
business your
competitive with company
fundamentals context
advantage priorities
Concepts and
vocabulary
Financial basics
Scenarios

Meet Them More Than Halfway
“The better strategy for
designers would be to regard
the current effort to educate
the CEO about how designers
see the world as a lost cause,
and instead try to educate
themselves on how the CEO
sees the world.”
- Richard Farson, “Designers
as Leaders”
http://www.wbsi.org/farson/com_design_leaders.htm

Financials + Scenarios
Expected Return
Ignoring fees to calculate the expected return of loan interest and equity
Outcomes
Replay loan, no Replay loan, 50% Replay loan, 100% of Replay loan,
Fail after 3 years Fail after 4 years equity of equity equity 150% of equity
Percentage of loan repayment 60% 80% 100% 100% 100% 100%
Average Investment $ 8,333,333 $ 8,333,333 $ 8,333,333 $ 8,333,333 $ 8,333,333 $ 8,333,333
Loan repaid $ 5,000,000 $ 6,666,667 $ 8,333,333 $ 8,333,333 $ 8,333,333 $ 8,333,333
Interest gained $ 990,000 $ 1,320,000 $ 1,650,000 $ 1,650,000 $ 1,650,000 $ 1,650,000
Probability of outcome 2% 3% 5% 15% 65% 10%
Expected value of loan repayment $ 119,800 $ 239,600 $ 499,167 $ 1,497,500 $ 6,489,167 $ 998,333
Equity multiple 0 0 0 2 4 6
Potential equity $ - $ - $ - $ 16,666,667 $ 33,333,333 $ 50,000,000
Probability of outcome 2% 3% 5% 15% 65% 10%
Expected value of equity $ - $ - $ - $ 2,500,000 $ 21,666,667 $ 5,000,000
Expected value of loan and equity $ 119,800 $ 239,600 $ 499,167 $ 3,997,500 $ 28,155,833 $ 5,998,333
Expected return $ 39,010,233
• Numbers can be sketches and prototypes
• Financial models are based on assumptions about the
future of the product
• Scenarios can be written in Excel

Case Study of Corporate Strategy: Microsoft
In 2005 an internal memo by Ray Ozzie, Microsoft CTO,
was published publicly…

Summary of Ozzie’s Recommendation: Scenarios
1. Work with division presidents to assign “scenario
owners”
2. Work with these individuals “to concretely map out
scenarios and pragmatically assess changes needed in
product and go-to-market plans related to services and
service-based scenarios” both short- and long-term
3. “All Business Groups …develop their plans to embrace
this mission and create new service offerings that deliver
value …and… utilize the platform capabilities…”
4. A blog

Discover the Align your
Know Understand
company’s customer need
business your
competitive with company
fundamentals context
advantage priorities
Concepts and Interpersonal
vocabulary relationships
Financial basics Dialog style
Scenarios

Abductive Reasoning
When faced with: Try:
Negotiation Collaboration
Jump to obvious options Generate new options, use a
process to narrow them down, then
decide
Constraints Question the constraints, and
generate options within the
constraints
\"We can't afford the new widget. Do you want to use existing widget A
or B?\"
“What else do we have? How else can we use it? How else can we
get the money for the new widget? Can the new widget do something
additional to help the people making the financial decision? Let’s
brainstorm more options…”
For more on abductive thinking see Liedtke, http://www.rotman.utoronto.ca/pdf/rotman_mgmt_winter03.pdf

The Neuroscience of Leadership
David Rock and Jeffrey Schwartz
• Change is pain Organizational change is unexpectedly difficult
because it provokes sensations of physiological discomfort.
• Focus is power The act of paying attention creates chemical and
physical changes in the brain.
• Expectation shapes reality People’s preconceptions have a
significant impact on what they perceive.
So…
• Focus people on solutions instead of problems
• Let them generate their own insights
• Keep them focused on their insights
http://www.strategy-business.com/press/article/06207?pg=all

Discover the Align your
Know Understand
company’s customer need
business your
competitive with company
fundamentals context
advantage priorities
Concepts and At each level:
Interpersonal
vocabulary relationships
Corporate
Financial basics Dialog style
Business unit
Scenarios
Business model
Product Line
Product
Operations

Example: Acme Publishing Company
Strategy:
“Change mix of business to keep up with evolving
consumers and advertisers; become more brand-centric
and expand market-leading brands; innovatively attract new
customers; and explore new revenue opportunities through
cross-selling and multi-platform sales.”
Implications for the designer:
Talk about new design team hires in terms of how it will
benefit marketing
Try to introduce features that also become ‘marketing
features’, e.g. Wow/viral features

Many paths to success…
•Coke
•Apple
•General Motors
Customer Focus
•Time Inc.
•Alessi
•AIG
Role that design plays in offering

Product Level Focus
•Kodiac
•Corvette
Customer Focus
•Silverado
•Aveo
Role that design plays in offering

The Leverage School of Strategy…
+ =

Evolving Strategy
Google
Google 1.0 search engine
Google 2.0 sold its search capacity to AOL/Netscape,
Yahoo…
Google 3.0 sold simple text ads linked to search results
Google 4.0 inserted relevant ads into any and all Web
content
Google 5.0 is an innovation factory that produces a
torrent of new Web-based services, including Gmail,
Google Desktop, and Google Base
Gary Hamel, “Management à la Google”
http://tinyurl.com/o4w7f

Buying strategic options…

Discover the Align your
Know Understand
company’s customer need
business your
competitive with company
fundamentals context
advantage priorities
Concepts and Interpersonal At each level:
Align with short-term
vocabulary relationships priorities
Corporate
Financial basics Dialog style Align with strategy
Business unit
Scenarios Develop an
Business model approach for
building your
Operations capabilities
(e.g. bootstrapping)

A little about business strategy, and an exercise…

Business Strategy in One Slide: Porter’s Generic Strategies
“Strategic management is the process of specifying an organization's objectives,
developing policies and plans to achieve these objectives, and allocating resources so
as to implement the plans. It is the highest level of managerial activity, usually
performed by the company's Chief Executive Officer (CEO) and executive team. It
provides overall direction to the whole enterprise. An organization’s strategy must be
appropriate for its resources, circumstances, and objectives. ”
Porter’s Generic Strategies:
• Cost Leadership: sell at lower prices, usually by lower
costs or by selling in volume
• Niche: focus on one audience type and satisfy their
particular wants or needs
• Differentiation: offer a perceivably different brand,
product, or service
http://www.quickmba.com/strategy/generic.shtml

Cost Leadership

Niche

Differentiation

Which is the Internet Best For?
Price/Cost Niche Differentiation

Generic Strategies on the Internet
Cost Leadership Niche Differentiation

Cost Leadership + Differentiation: Blue Oceans
• \"Blue oceans\" are untapped and uncontested markets.
Blue ocean offerings cross conventional market
segmentation while simultaneously achieving lower
costs/price.
http://business-model-design.blogspot.com/2007/01/nintendos-blue-ocean-strategy-wii.html

Strategy Canvas: Wines
http://tinyurl.com/yp2fzd

Blue Ocean Exercise: Online Diet & Fitness Programs
High Weight
Watchers
Offering
RealAge
Daily Plate
FitDay
Low
Meal Fitness Tracking/
Style Price Community Offline
Plan Plan Reporting
Invent a blue ocean business concept that will offer something radically different and cost less than
competitors. Add additional criteria to this graph if you like.
What is the name of the product or service?
How is it better for customers?
How does that way of serving customers also help save money?