Having entered the vocabulary of the large majority of people. Businesses are seeing the importance of embedding and investing in user experience at all levels of their organisation.
One of the major benefits of embedding UX across your organisation is having one or many persons able to make connections across the three pillars: Customer, Technology and Business.
The goal is balance these pillars. Nothing in life can be perfectly balanced but one must look at each of these pillars and consider the impacts of their decisions.
Using some well known organisations we’ll have a look at what can happen if the balance is too heavily skewed towards one without taking into account the others.
Are you in this for the long haul? If you are, stop thinking of about the sparkle of new technology and think about what problems your customers are facing and look to solve them.
This sounds simple yet many companies and the people within them, have difficulty looking beyond it. They’re lured by the sparkle a new “innovation” brings.
The exact same customers who buy your products for this sparkle will sooner leave when another company offers something, um, sparklier? Ultimately by following this route you only gain short term sales with no customer loyalty.
Let’s look at some well known brands, to try and highlight this problem.
In the early 90’s Sega was struggling to make any sort of dent in the juggernaut that was Nintendo. Nintendo at the time held 90% of the video games market. They needed something special and that came in the form of Tom Kalinske (CEO) and Sonic the Hedgehog.
Sega’s performance under Kalinske’s leadership was nothing short of magical and within a few short years Sega was able to grab a 60% stake of the North American video games market from Nintendo and Sonic played a major role in building the Sega brand, he had attitude, he was fast, he was cool.
Sega’s story is well documented (Console Wars), I’ll try to distill parts I think are important.
Sega had to prove themselves in a market dominated by Nintendo. When you’re an underdog in any market, you don’t have much to lose. People tend to take more risks in the hope that one of those risks will pay off.
Their messaging was aimed directly at Nintendo, people needed to know the reasons why Sega was better than Nintendo. Their goal was to be the cooler brand in the videogames industry, aiming to be more relevant to the older video gamers.
As the development of the first Sonic the Hedgehog game was nearing completion, Tom Kalinske presented a radical 4 point plan to give the Sega Genesis / MegaDrive a much needed push.
The first part would be the toughest to sell to SoJ, bundle their new mascot with all new console purchases. It was a crazy idea that could cost the company tens of millions in lost sales but Kalinske was thinking long term, this would help push ownership of the actual console in turn potentially increase the amount of video games purchased.
After a rather hostile board meeting, Tom Kalinske managed to secure support from the SoJ CEO and in the end the execution of his plan was near flawless. The sheer tenacity of SoA helped them wrestle away huge market share from Nintendo.
1988 - Sega Mega Drive
1991/1992 - Sega CD
1994 - Sega 32X
1994 - Sega Saturn
But success didn’t last long, things started to fall apart when SoJ began to develop too many products for the inevitable “Next Generation” battle. Instead of focussing on one new product for the next generation, they tried to launch many products which while interesting should’ve been kept in the R&D lab.
In their scramble to portray a cutting edge image and address concerns from competition, it seems Sega forgot to think about supporting their existing customers who already owned their consoles. For gamers, once they have invested in a console they expect high quality games to be released.
With 3 poorly performing product: the Sega CD (1991), 32x (1994) and Saturn (1994) in terms of sales, consumers were confused as to why they had to keep buying hardware or even why they spent money upgrading when a next generation console would be released within the same year.
Their attempt to remain cutting edge through relying on technology and thus releasing ill-thought out products sullied the Sega brand, beyond repair.
By the time Sega released the Dreamcast in 1998 the damage was done, most customer loyalty had shifted, to the new cool kid on the block, Sony.
In 2001, only a few years after the Dreamcast’s release. Sega announced that they would be leaving the hardware side of video games and focus solely on software.
It’s easy to look back now and be shocked that such a large corporation with so many great people at the helm make such strange decisions but this still happens today in the company you work for only it happens at such a slow pace that the impact isn’t seen until much later.
- Don’t rely on technology as the be all and end all of your business strategy
- Being first to market doesn’t always equate to success
- Knee jerk reactions to competing products only serve to damage your brand and waste valuable resources
- Look for problems your customers are already facing and look at how to solve them, technology is not always the answer.
- Customer experience doesn’t end after purchase.
Easily one of, if not the biggest player in the smartphone market. Samsung made massive strides in their annual performance following the release the the Galaxy S2, the success of which cemented Samsung as a true competitor to Apple’s iPhone.
Unfortunately this wouldn’t last long, competitors were chipping away at Samsung and though it might have taken a few years, when it finally hit Samsung, it hit hard.
Samsung has been building phones well before the smartphone revolution, but for the purposes of this piece we’ll be looking specifically at their journey in the smartphone market and once again
Samsung enjoyed stellar success following the release of their flagship series, the Samsung Galaxy S, sales of the S2 almost doubled it’s predecessor (25m S1’s sold Vs 40m S2’s) and the S3 went on to do even better (60m), three consecutive years of unprecedented success put Samsung on everyone’s radar, especially investors.
But things started to fall apart, the S4 sold less than the S3, the S5 didn’t fair well either. Year on year losses were catastrophic, Samsung Mobile reported a 74% loss of profit in 2014 compared to 2013.
Just what is going wrong for Samsung? The Galaxy “S” series is their flagship phone, below the flagships sat a further 56(!) smartphones. It goes without saying that their product lineup is convoluted.
Another reason from a market perspective is the commoditization of smartphone components, making it easier for competitors to access the same technology and go on to offer similar products at a much lower price point.
The customers Samsung fought so hard for, the price sensitive customer who love spec sheets can now get the same for much less.
To compound the issue even further, Apple released the ‘Plus’ model iPhones to answer to market demands and to of course, compete against Phablets, a niche that Samsung created demand for.
Samsung is now being squeezed at both the high end and low end of the market. No one likes to be stuck in the middle.
Samsung’s marketing tact is to list their haves and the competitions have nots, through this they’re only able to answer the ‘what’ but they don’t come close the answering the ‘why’. By doing this, they’re not giving consumers a reason to buy into their brand nor a reason to stay.
Having spent years drilling the same monotonous message makes for a very difficult road ahead. Samsung is aware they need to reduce the product lines but software is going to be a big problem for them.
Their reluctance to invest in proper software development is now becoming a larger issue for them, no longer can they hide behind the sparkle, they design beautiful hardware but their software just doesn’t have the same polish and the pain is often spoken by their own customers who talk about how bloated TouchWiz is.
Samsung is a massive company, the breadth of industries they operate in can be mind boggling. From Televisions to computers, phones to white goods, security systems to vacuum cleaners. Putting them in a position many companies would envy, they have the ability to be part more aspects of their customer’s like.
Software integration across their entire product line may sound far fetched and talk of a smart home or a connected home is nothing new, but as with their mobile division, the rest of Samsung also focuses on pushing product after product.
- Convoluted product offerings
- Product messaging focussed only on the what and not the why.
- Using novelty features/functions and calling them innovation
- Poor software implementation and cross product integration
Remember the days when mobile phones used to have substance? The days of flip phones and blue backlit screens fill me with nostalgia. A time where the phone you held said as much about your personality as the shoes on your feet.
A time before “My rectangle is bigger than yours” meant anything. Well, keep puffing that pipe grampa! Times change!
And change they did.
The introduction of the iPhone was a market shift of tectonic scale. You could see it in the reactions of many high profile CEO’s who all at the time claimed that it would be a dismal failure and that Apple didn’t know what they were doing.
Only for all these companies to be playing catch up like never before. Google for example, had been working on the Android operating system years before the iPhone announcement, had to go back to the drawing board.
At the height of their success, Nokia commanded a 41% market share of the global mobile market, unheard of in today’s environment. Their stranglehold on the market should’ve put them in prime position to either direct where the market would go or respond to competitors.
So what caused Nokia to fall apart? Fear.
Fear of changing the status quo, fear of trying new technologies. According to accounts from previous Nokia employees, Nokia was structured towards risk aversion and had a complex approval process to prevent high risk proposals from gaining any traction.
They were heavily invested in Symbian, a mobile operating system primarily designed for feature phones, navigating via a small joystick.
It just wasn’t cut out for touch interactions. Nokia released the N95 and the N97, while both devices were well designed for the time their reliance on Symbian really hampered their potential.
Many report highlighted the rigid organisational structure along with a culture which didn’t encourage any risk as primary reasons for Nokia’s fall from grace.
- Nokia banked too much on their Symbian operating system and took too long to realise it was time to let go.
- Failed to listen to industry shifts and consumer sentiment
- Nokia made great hardware and beautiful phones but by the time 2007 rolled in, Symbian was dated and it was software that defined the customer experience.
- An Apple-like app store had been proposed way back in 2004 but was rejected as being too risky
- Reports indicate organizational structure hindered progress
From humble beginnings in the 80s, RIM was the darling of Silicon Valley. By 2007 they commanded a huge share of the smartphone market and everyone wanted a piece of the Blackberry pie.
It’s easy to read about RIM’s failures and wonder to yourself how a company with so many smart people, fail so spectacularly. You couldn’t put all the blame on Co-CEO’s Jim Basillie and Mike Lazaridis, it was a different time then and the iPhone was something that no one thought was possible.
One major roadblock for RIM was the telecommunications industry, most carriers at the time either didn’t want to support or allow large data transfers and limited what RIM could do with their products.
It was Apple’s ability to cut a deal with Cingular that really opened up the floodgates. In the book about the rise and fall of RIM, Losing the Signal, it mentioned a conversation Mike had with Jim post the 2007 iPhone announcement:
“Jim, I want you to watch this,” he said, pointing to a webcast of the iPhone unveiling. “They put a full Web browser on that thing. The carriers aren’t letting us put a full browser on our products.”
Although carrier issues prevented RIM from doing many things their actions from 2007 onwards didn’t go towards helping their business.
Mike Lazaridis didn’t believe in touchscreens and felt that onscreen keyboards were a poor replacement for physical keys, RIM had spend much time and money on perfecting their small but very usable physical keyboard on their devices.
When Steve Ballmer (then CEO of Microsoft) was asked what he thought about the iPhone in 2007, he laughed out loudly at how ridiculous the cost was, that it didn’t have a physical keyboard and that it didn’t make a great “email machine”
It was the mindset at the time that smartphones were only for business people and these types of users need to email often. This meant an onscreen keyboard would not suffice for their needs.
So RIM continued to view the iPhone as only a small threat to their business. This proved to be disastrous.
With the introduction of the Blackberry Storm in 2009, RIM’s first foray full touchscreen was a dismal failure, poor hardware married with poor software and high device failure rate burnt many Blackberry faithfuls.
- RIM like Nokia, didn’t listen to consumer needs and held on too much to their own misguided beliefs. By the time they changed their minds, it was too late.
- The operating systems they had invested heavily in was not cut out for full touchscreen devices and after years and years of added features it became bloated and slow.
- Internal bickering at the top end of the chain led to poor decision making and lack of clarity for employees.
We looked at two companies which focussed too much on technology and another two that were too slow to accept new technologies and a shifting market but one thing I feel these companies have in common with each other is a poor software or platform experience.
During my research, it often felt that these 4 companies spent much effort on sales growth or maintaining existing business models at the expense of building a solid platform for the future that would make customers to want to stay. It’s easier to show year on year growth than it is to show customer retention over a multi year period without serious investment.
Instead of trying to balance the three pillars of Customer, Technology and Business they skewered to heavily towards only one or two and paid heavily for this.
I’d like to finish off that these companies at one point or another were at the top of their game and leaders in their respective markets. So It’s easy to look at these outcomes and point out all their mistakes and missteps.