Figure 1: Shows that the underlying business model(s) and the design need to be equivalent to achieve success
Understanding your business models and how they support your digital design is paramount to becoming Digital First. Mismatch between the underlying business models and the digital design is often one of the primary reasons for underperforming digital products and services.
A business may be operating multiple business models, therefore your digital team’s understanding of each model and more importantly how they combine is essential.
Attaining business model understanding may represent a completely new skill set and way of thinking for many digital designers. Businesses and digital practitioners that attain this understanding are operating more strategically and are demonstrating a more mature skill set.
Essentially, the fit between the business models and design should be thought of in terms of equivalence. Therefore, determining the level of equivalence between the business models and the design is critical. Your customers are the people that will confirm if the equivalence is strong or weak. In this regard, equivalence (or fit) represents success - the shared value that exists between the customer and the business.
Yet very few companies have achieved strong equivalence between their business models and design experience. What is becoming more obvious is those businesses that have embraced design and are aiming for design excellence are out performing those that haven’t. Essentially, achieving equivalence should be considered an act of design.
How can a Digital First approach help?
A Digital First approach can help you address the difficult questions that often emerge when trying to deliver a better digital design experience. Digital First is strategic, which means it works globally by supporting a focus on understanding the business models. Specifically, understanding how to choreograph user interfaces and user experiences so they feel more joined-up and therefore equivalent to the underlying business models.
Knowing the answer to the question of ‘how well do your designs match your business models?’ will often separate a successful digital experience from one that feels average.
Digital First also helps defend against the seemingly spontaneous and continuous onslaught of digital disruption. The modern digital mantra has, for some time, been that you are either disrupting or being disrupted. Obviously, it is better to be ahead of the disruption curve and the resulting commercial pressure and risks that are faced as a consequence.
Figure 2: The who, what, how and why behind a business model (copyright Gassmann et al, 2014)
So does your business model match your design?
Digital First encourages strategic thinking because it encourages evaluation of digital products and/ or services by establishing the equivalence that exists between the business models and the design experience. When there is a strong match between the business model and the digital experience, key characteristics of the business are easier to observe:
• How business and consumer value is generated
• The mechanics and logic of the value chain
• The supporting networks, both internal and external and how they are co-ordinated
• How the design supports the ‘why’ of the business model ie. how does it generate profit
Often designers can be overly focused on consumer value with little appreciation of business value. This can be considered a consumer-dominant perspective. Digital First thinking encourages a focus on both business value and consumer value which lead to a holistic approach to digital design. Focusing on one area more than another may result in some fundamental considerations being overlooked in the design process. Typically, this manifests in terms of inadequate or inappropriate interactions being supported. Such interactions represent the foundation of the digital experience. If the interactions are inadequate then the user experience will feel broken. This supports neither the customer or the business. Therefore, without balancing the understanding of both business and consumer value we are likely to create a lopsided experience - a false positive.
New digital products or services may often fall into the trap of designing for a surface perspective. On the surface the digital experience may appear to feel superior when compared with previous incarnations. Yet, the new digital experience may also be underperforming which can seem counter intuitive e.g. the new design looks better, incorporates best-practices but does not deliver commercially (revenue numbers instantly decline; usage falls and brand perception is not honored).
Essentially, the business value component has been missed out of the design process and often was never even a real consideration in the first place. The outcome can be a website that looks much better with a more modern user interface and user experience patterns, yet it has alienated its primary consumer segments e.g. it is making much less money because the design no longer supports customer acquisition as well as it did previously. The result is a new design that is worse for the business.
Furthermore, in our digi-modern world a focus on the customer may not be enough to succeed in the 21st century. It will certainly help you get closer to the consumer but how do you sustain your efforts? I believe the answer will require more UX Strategy and Digital First can help because it encourages consideration of the ‘whole’ business.
Consumer-Business Value Equation
Business value and consumer value go hand-in-hand and both need to be understood in detail. This is where UX Strategy comes into play because it forces a focus on both rather than a feature, functionality, user interface, button or call-to-action. UX Strategy is holistic and brings perspective to the many factors that would benefit for user experience. Thinking about the experience as part of the wider system that provides both business and consumer value, and looks at interactions globally, represents a recipe in terms of how to win digitally. Great digital experiences are often based on great systems with a compelling business model - Uber is a great example of how digital, when applied well, can disrupt a whole market, globally!
Digital First encourages people to see the bigger picture and ultimately think more holistically about experience. To successfully digitally transform requires that we understand the gaps, areas of weakness and immaturity with current digital thinking and approaches.
Digital First helps businesses with the delivering of better customer experience because it encourages a company-wide approach (a systems approach). This is often at odds with the established divisional thinking that results in silos rather than integration. Adopting a holistic perspective is not easy to initiate, let alone do successfully. It requires a sustained effort but can lead to the development of a totally new value curve. Again, Uber is a great example of what can be achieved when business models and the digital experience match and therefore feel equivalent.
One of the first places we start with is by understanding where a client sits in terms of their UX Maturity. A number of questions need to be addressed including:
• How mature are current UX practices, thinking and tools?
• How well does your experience fair against your competition?
• Is support in place for the delivery of better designed employee-focused systems?
• Is there a plan to improve capability?
• How do you measure success?
Discovering answers to these questions may reveal that modifying existing business models or combining new ones may be required to compete more effectively.
Establishing your UX capabilities through analysis of your team, supporting processes, artefacts and technologies is the starting point. This will expose the gaps and can provide insights and thinking to bridge those gaps. Digital First encourages the ‘connecting of the dots’, e.g choreography of experience and how we feel about it.
Figure 3: Nomensa User Experience Maturity Model
A Digital First philosophy will guide you in thinking bigger and imagining deeper. This is an approach I follow to provide a more human rather than technology-led or transactional experience. It will help you to design experiences that feel humane - more than merely functional. Essentially, Digital First encourages holistic thinking and practice, and this is a precursor to embracing wholeness e.g. not getting too carried away with the micro elements of an experience and thinking about the wider, larger experience - the gestalt.
Digital First embraces the ideas inherent in digimodernism because digital is intangible and therefore not governed by the same rules that govern physical space - digital can and will go everywhere and into everything. This is especially true when we think about the increasing usage of ambient and intelligent agents. These agents extend our capability, our agency - our wholeness.
Figure 4: Theodore (Joaquin Phoenix) setting-up OS1 (copyright Warner Bros. Pictures, 2014)
We can already send machines across the Internet and we are planning to send them into space. These machines extend our capability both individually and as a species. I’d argue digital is an extention of being human and this is something we need to embrace, yet embrace carefully. Determining how your business can benefit from a systemic approach is how to embrace wholeness.
Conversely, so many companies are not even at this stage of digital maturity and may not even be thinking about it. However, we should not limit what digital can and will likely do or what we should do with it. The future application and benefit of digital requires mindful thinking and practice.
Why has Uber been so successful?
One of the reasons Uber has been so successful is because it brought multiple components of its business model to life through delivering a better commercial, as well as, consumer experience.
Uber has turned the taxi market on its head. They have turned a traditional supply-based business model by supporting both supply (hailing a taxi on the street) and demand (through a service e.g. taxi operator phone number) into a purely on-demand model. Uber has changed the market by focusing on a digital delivery system e.g. a P2P business model that connects taxis and people together through a software system.
Uber has invested in creating a very high standard of interactions, user interface design and therefore user experience. The means the system is easy to set-up and use for the taxi driver and the taxi rider - this represents the ‘what’ or value component of their business model which utilises the experience selling business model pattern used successfully by companies such as Starbucks, Harley Davidson and Redbull. In effect, Uber provides a new unique service that is transparent, cashless and convenient - users just demand (order) a taxi through the Uber app. Users can track the taxi both in terms of arrival and destination, as well as, rate the driver in terms of service and ultimately you don’t even need to hand over any money - the system takes care of everything pretty much. This focus on User Design and therefore the quality of the user experience is disrupting the taxi markets of cities Uber operates in.
Uber is a great example of how a service with a supporting customer experience can provide a more distinctive service and therefore better experience.
Additionally, Uber benefits from implementing the Revenue Sharing Pattern. Uber has no cars (assets) and therefore benefits from lower operational costs which it can pass onto its customers as cost-savings (lower fares). They benefit from access to large number of taxis where their software system connects drivers and riders together. The taxi drivers pay uber a fee split (typical 80/20) per journey and everything is calculated and managed by their system making it very easy for taxi drivers to join Uber. The transparency of the system is a major value add for both the consumer and business.
Figure 5: Uber black cab and Uber app
However, great user experience and user interfaces may not be enough to create distinction in your business model! To create a business model that is disruptive you need to design the user experience around the business models you are utilising. Uber understands that taxi drivers and taxi riders both have different needs, yet, are supported by a system (P2P network).
So the old fabled quote from the film a Field of Dreams “If we build it, he [they] will come”…should be read ‘really or only if it provides the value people are seeking’!”
This philosophy was one I recall being repeated at the beginning of the web’s transformational uptake back at the end of the 90s. It’s simply too risky to think that pure innovation, technology or value alone will drive engagement and therefore adoption. History has repeatedly proven this idea wrong, e.g. the betamax video format. Too many businesses operate with a betamax mentality when it comes to digital. Understanding how well your design and supporting interactions reflect your business models is commercially a more sensible approach because you have shifted to focus towards experience and taking a holistic (macro) approach. There is a lot we can learn from systems thinking and digital is becoming the de-facto approach.
Are you Digital First?
Adopting a Digital First approach can inspire you to cultivate deep consumer and business value insights about what determines and influences digital success, which can lead to greater revenues, profits and cost-savings. Digital First thinking encourages a strategic approach to digital design and user experience.
It also demonstrates a commitment toward providing better digital experience both internally and externally which supports the whole value chain e.g. from employee to customer.
Digital First supports the process of joining the dots (key interactions) and should be thought of as uncovering and understanding the logic of the value chain e.g. where it undermines experience and where it adds value. The value chain should be thought of as the flow of interactions that choreograph the customer and the business - this is the foundation on which a successful user experience is crafted.
So, how do you know if you’re even on a Digital First trajectory? What are the tell-tell signs and characteristics of a Digital First organisation or one that has set it as an ambition?
Ask yourself the following questions:
1. Are you certain about what your customers actually want?
2. Are you searching to better understand your customers digital experience?
3. Do you know the Return on Investment of your UX spend?
4. Does your digital team operate in a silo?
5. Do you have people that are dedicated to UX, and senior UX people?
6. Do you know the difference (value and benefits) between Customer Experience and User Experience? Do you work to provide a blended experience (e.g. UX and CX together)?
7. Are you constantly producing consistent user experiences regardless of channel or touchpoint?
8. Are you High-Tech but still neglecting the customer service basics?
9. Do you think that designing a great user experience will just happen if you have the right technology or people?
Whilst the questions above are not exhaustive, they allow an understanding to develop in terms of Digital First thinking and practice. Answering them correctly requires a level of honesty and openness and that in itself is also a sign of commitment to being better and delivering better experiences through delivering better design. If you want to be better at digital, then a Digital First way of thinking will certainly help.