Zone to win and UX (Incubation Zone)

In my previous blogs, I covered the Performance Zone and the Productivity Zone within Geoffrey Moore’s framework. In this blog post, I am covering the Incubation Zone and how it impacts the UX strategy within that zone.

Incubation Zone

The Incubation Zone has the longest time horizon (3-5 years), and for a company to invest in such a distant future, it needs to be a disruptive innovation with a significant potential impact. The goal is to create the “next big thing”, not just innovation in technology or in the business model. This effort, if successful, should result in a “new company” with a significant revenue stream coming out of it (10+% of total revenue).

The recommendation is to manage each initiative as an independent operation unit and manage them separately. In the same way as a start-up requires funding from venture capitalist, each operating unit requires funding from the company (the company appoints a venture board). This mean the initiatives here live the uncertain life of start-ups, they might run out of funds, be shut down, spun-off, etc.

If the company is in growth mode, the initiatives can flourish in this start-up like model (as long as they seem promising), and the goal is to become successful enough so that the company will pick it up as a new line of business. If it fails, it might get a second chance, but not a third.

If the company is primarily trying to protect their market shares, these initiatives are instead needed to help the rest of the company and fight off potential threats. This means that these initiatives have to integrate their technologies into the existing business, even if it means the end of that initiative as a star-up.

UX professionals working for initiatives in the Incubation Zone will be working in a start-up like mentality even if it is a well-established company. This results in wearing multiple hats, and at times, maybe even perform non-UX work.

If the company is focused on growth, the initiatives can continue operating as a start-up, which means running at the speed of light. The UX strategy most appropriate would therefore be Lean UX and other processes that work well in an extremely agile environment.

Alternatively, if the company primarily wants to protect their market shares, the technology of the “start-ups” needs to be integrated to the existing business (initiatives in the Performance Zone). If these initiatives already are staffed with a generalist, they might need to layoff the UX employees working in the “start-up”.

Next blog post will cover the Transformation Zone

© David Juhlin and www.davidjuhlin.com, 2017

Zone to win and UX (Productivity Zone)

In my previous blog, I covered the Performance Zone of Geoffrey Moore’s framework. In this blog, I am covering the Productivity Zone and how it impacts the UX strategy within that zone.

Productivity Zone

The Productivity Zone contains all functions that don’t have any direct accountability for any revenue (finance, legal, HR, tech support, etc.). The goal of the Productivity Zone is to make sure all the other zones can work efficiently (“doing things right”) and effectively (“doing the right things”). The time horizon in this zone is short and aligns with the Performance Zone, i.e. next fiscal year.

If the company’s overall strategy is growth (expanding into new markets or offering new products/services), the Productivity Zone has to develop new programs to handle the change. This mean they might need to reallocate resources as well as allow more flexibility in processes (they might for example need to loosen up rules regarding approved software).

If the company primarily tries to protect their current market shares, the Productivity Zone’s primary objective is to keep costs down so resources can be distributed to the other zones. This means that the Productivity Zone should focus on reengineer and streamline processes (centralize, standardize, optimize). It can even mean the company will outsource parts in the Productivity Zone to keep costs down.

There are not as many UX professionals working in the Productivity Zone since the zone doesn’t generate any revenue stream for the company. However, the UX effort also depends on the different type of functions (customer facing, supplier facing, or internally facing). Within the Productivity Zone, the customer facing functions tend to have a larger concentration of UX staff than the other two (supplier facing, and internally facing). The reason for this is that even if it is not directly impacting the revenue, the customer facing functions still have an impact on the customers and the sales. Just think about customer support and how it can be important for future purchases. For the internal systems and the supplier facing systems, the UX is often a low priority and the focus is on making the systems efficient enough (“able to complete a task fast”).

Independently if the company is going through growth or trying to protect their market share, a beneficial way to provide UX expertise is through an agency model. This agency can be internal, external, or some type of hybrid. The agency model would allow UX expertise at the same time as the agency can manage work fluctuations from the different groups and, if needed, contract out to external resources.

If the company is in growth mode, the agency would need to manage a lot of external resources and make sure they can deliver a “good enough” solution. An internal agency should take on high priority projects themselves and outsource the less important projects.

If the company primarily tries to protect their market share, the main goal from the Productivity Zone is to keep costs down. This can result in a lot of layoffs among the UX agency team and the company might even go to a model in which UX design is completely outsourced.

In my next blog post, I will cover the Incubation Zone

© David Juhlin and www.davidjuhlin.com, 2017

Zone to win and UX (Performance Zone)

Zone to win is a book by Geoffrey Moore, in which he presents a framework on how to manage a corporation during a time of disruption. You begin by splitting the company up into 4 zones and then manage each one separately. In turn, this has an impact on the UX strategy, which has to be adjusted for each zone.

In this initial blog, I am covering the Performance Zone, and in my upcoming blogs, I will cover the other zones (Productivity Zone, Incubation Zone, and Transformation Zone).

Performance Zone

The Performance Zone contains the bulk of all mission critical products/services in the company. These are the company’s “Cash Cows” (usually over 90% of revenue is generated from products/services in this zone). Therefore, this zone also consists of a large portion of the company’s employees.

The goal in this zone is focused on sustaining innovation, and the time horizon is for the next fiscal year. Basically, the company needs to make sure they make “the numbers” every quarter.

If a company’s overall strategy is to grow, it would require them to expand the offerings to new market segments or offer new products/services. Therefore, the main problem for initiatives in the Performance Zone within a growth focused company, is to manage the allocation of resources.

On the other hand, if the company primarily tries to protect its market shares, their primary goal is to retain customers. In other words, they don’t focus on attracting new customers, just keeping the ones they already have from deserting them and going to a competitor. Because of this, the R&D initiatives are primarily focused on making your products “good enough”.

Most of UX professionals work in this Performance Zone since it contains the bulk of the products/services that the company offers. If the company is focusing on growth, it is important to manage the UX resources closely. They should not be spread too thin. Instead, it is better to focus on some projects and make sure they are staffed appropriately.

If the company is going through a transformation (they invest heavily in new technology), the primary focus should be on projects that align well with the initiatives in the Transformation Zone. Thereafter, a ranking of projects needs to be made. There are many components that need to be taken into account, but make sure to include the following:

  • Severity of the user pain point you would be solving – higher pain, the more you can charge for the solution.
  • Market potential – the larger market, the more you can sell.
  • Internal capabilities – if you can weave together many internal capabilities/products to deliver a superior solution to the user pain, the harder it will be for competitors to replicate your offering and you’ll be able to reap the benefits for a longer time.

Alternatively, if the company is primarily trying to protect their market shares, the UX team needs to be spread out on many projects to maintain the products/services to be “good enough”. This means that the company may need to be staffed with more UX generalists compared to when the company can focus on specific projects and can allocate many UX resources to one initiative.

Next blog post will cover the Productivity Zone

© David Juhlin and www.davidjuhlin.com, 2017

Marketing and UX

In some companies it seems as if the Marketing and UX teams have a rivalry going on. Their fight for turf often hurts the company, and it is important these struggles are taken care of and sorted out.

Rivalry

The field of marketing has gone through a similar evolution as the UX field. They had to fight for acknowledgement and had a hard time justifying cost for themselves. A famous quote from John Wanamaker is: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” I would not say that we UX practitioners are wasting half of our money, but it is hard for other business units to really understand our value. Therefore, we are adding more “hard to count” expenses in the company which means it will be harder to allocate resources.

In the early days, UX was a small portion of a company. It was often embedded in the engineering/R&D department and our focus has always been to understand the users and make products they enjoy. Initially, the main focus was on making things usable, but as Design Thinking grew in popularity, UX has been moving more towards making things pleasurable and identifying opportunities for innovation.

Who is on whose turf?

No questions about it, both UX and marketing are on each other’s turf. Marketing used to own the customer insights and feed this into the company. They reported on trends in the market, including topics such as what products were more/less popular. Through our role as UXers, we take away from the company’s perceived importance of marketing in providing customer insights.

On the other hand, both User Experience and Design Thinking stems from the R&D/Product Design. So this would mean UX should be in charge of improving products and identifying innovation opportunities by understanding user needs. The Marketing field has developed Customer Experience, and one part of customer experience is exploring opportunities for innovation. In this instance, the marketing department has moved into the UX turf.

A path for the future

Within each company, it is important that there is a clear division between the two fields, but also allow some overlap. In my opinion, Marketing should focus on the larger market trends and function like a marketing agency that can aid in product marketing, whereas UX should focus on the R&D, including innovation and enhancing products.

The area of overlap and collaboration is customer/user insights. Even if this is assigned to one or the other, no one should ever truly own it. This information is so critical to a company’s success that it need to be shared throughout the entire company. The only way to achieve this is too burying our hatchets and work together, having regular meetings between the teams where you discuss new insights discovered, initiatives under way, and any potential joint efforts.

Conclusion

Both the marketing and UX field are moving towards each other, and we are infringing upon each other. The fight between us is hurting the company so we have to find a solution to the problem. My recommended solution is to find clear division on some parts, but to always share the customer/user insights, as we can help each other to achieve greater success for the company.

© David Juhlin and www.davidjuhlin.com, 2017

The follower strategy

In many industries it is important to have a good user experience, but does your company have to deliver the best UX in the industry? Also, is it even realistic to believe you can produce the best UX in the industry? More often than not, it is more realistic to produce a user experience that is slightly behind the best in the industry – in essence, to be a follower instead of a leader.

Why being a follower is the right thing

Let’s start with basic math. Independent of how many companies there are in any given industry, there can only be one that delivers the best user experience. So if there are 10 companies in an industry, 9 of them aren’t UX leaders. Basic probability makes it much more likely that your company will be among the followers rather than the leader. Don’t set a goal you can’t reach.

At this point you might think, “but it is better to aim too high because it will push us to advance and do better work.” Unfortunately, the results often become reversed and you actually become worse off. The reason for this paradox? In order to be a UX leader, you need to have different processes in place than if you aim to be a follower. As a UX leader you are doing a lot of discovery work, exploring many ideas that might later on be scrapped, and going through many iterations. If the budget is too small and you are cutting corners, the result will be suboptimal.

For example, let’s say you want to create an online retail store (or redesign an existing one). If you try to come up with a new innovative way to design the product page, you will be spending resources on exploratory design. The resulting designs might be new and flashy, but you probably haven’t succeeded to create a page that outperforms Amazon’s product page. In addition to creating a design that is not outperforming the others in the industry, you have also spent a lot of valuable resources that could have been spent on other UX efforts like the customer support (increased staffing, redesigning the ‘customer support’ section of your website, educating staff, etc.).

Here’s another way to look at it. If your UX budget is half of the UX leader’s budget, how can you possibly deliver better user experience for half the budget? In my mind, every company’s aim should be to deliver the highest quality experience possible within their budget. Understanding how to spend that UX budget is paramount. If the aim is wrong, you’ll spend it on the wrong things. This, in turn, allows other followers who allocate and spend their UX budget appropriately to outperform you.

How to be a follower

Broadly speaking, the follower strategy is founded on the fact that most companies can’t be the UX leader and instead should focus on delivering as good of a user experience as possible within their own constraints. The exact approach a company takes might vary – just because one approach works for one company doesn’t mean it will work for yours. One important thing to keep in mind is to try to make all choices align and work together. Here are some examples of what a company can do if they are a follower and want processes to align:

  • Limit introductions of products that require you to build up or change customers’ mental model. It is very difficult (and expensive) to do this. For example, let’s say you introduce a new, more secure money transfer method where users need to create an online ID before they can make any transactions. You will need to build up a new mental model for the customers and it may take a lot of effort in order to make sure each transaction is still is a seamless experience. However, if you come up with a clever way to create a new mental model, you can reap huge first mover advantages (for example, when Apple created iTunes and its App Store). It is critical for a follower to limit the amount of discovery projects in order to minimize risk. Only try leading the way when you’re positive that the idea is revolutionary enough to change an industry and you can reap large financial benefits.
  • For products or features the UX leader has already launched, the follower can cut out a lot of early exploratory design. For example, as leading banks introduced remote check deposit, followers did not have to design the experience from scratch. Instead, they could look at the UX leader and evaluate the experience the leader provided. From there they could try to address any potential issues found in the leader’s design. In the same way, if a grocery store receives a lot of complaints about long checkout lines, follower companies can look at the leader to see how they have solved the problem instead of starting from scratch.
  • By primarily copying elements/functionality/service protocol/etc. the follower can have more standardized processes. If you are creating a new ride sharing application, you might be better off to do some usability testing of the leaders (Uber, Lyft and Fasten). Take those learnings and create a new design. In these types of cases the user research team only needs to do usability tests and can be set up as a usability test factory. In the same way, the UX designer might be able to go straight to implementation and skip the prototyping phase. This results in both the researchers and the designers becoming very efficient with these specific methodologies and tools, making them highly productive. The drawback is that they might not be as well versed in other methodologies and tools. Because of the standardized and limited methodologies and tools used, the followers can develop a smooth on-boarding process for new UX hires to quickly get up to speed. Standardized processes and easy on-boarding also allows the company to hire more junior UX professionals since they can be taught the specific methods and tools quickly. All of this allows the company to run a cheaper, still very efficient UX group.

As mentioned earlier, these specifics might not work for your company. You might need to have a mix of follower and leader strategy where you primarily apply the follower strategy, but in some specific areas you aim to be the leader.

When to use the follower strategy

The first case where the application of the follower strategy might be useful is when the UX division is underfunded. This might happen in a centrally funded organization that has too many projects to support appropriately or in embedded teams when the UX professional have too many engineers/developers to support. This leaves the UX team with two options:

  1. Focus on a few specific projects/features where they can apply the UX leader processes and leave other less critical projects without support;
  2. Adopt a follower strategy in order to support as many projects as possible even if they are stretched thin over all projects.

The second case where it might be beneficial to adopt a follower strategy is when competitors are investing heavily into user experience and there is no way your company will ever be able to match the spending. In this case, it is better to adopt a follower strategy for the user experience since it is almost impossible to beat them.

The third case in which a follow strategy should be adopted is when your industry is not driven by the quality of the user experience. For example, if you are a coal production company or producing some other commodity. Your customers are large corporations and they will primarily purchase from companies that can provide the best price and deliver the goods on time. Sure, they will appreciate a rewarding customer experience in the form of you taking them to a football game, etc., but you don’t need to come up with new or innovative experiences. It is more important you are on par with other suppliers’ experience.

Dangers of being a follower

By assuming the follower role, you will continuously be behind when it comes to user experience. This, however, doesn’t equate to having a poor user experience. UX has a correlation to revenue so forsaking it completely would be a huge mistake.

You also need to evaluate the industry you are in. For some industries UX is much more important, so assuming a follower role can be very unfortunate. An obvious example is if you are a stand-up comedian – you are delivering an experience. That is the single most important thing you should focus on. Here you have to be a leader and create your own jokes. How fun would it be to go to a comedy show where the comedian only told old jokes you already heard? In the same vein, it is important for entertainment companies like Disney to be a leader.

Finally, your company also needs to have some other unique value proposition to the customers if you adopt the follower strategy. In other words, if you don’t beat the UX leader on anything, why should someone buy your product? The unique value proposition can be many different things, but one example is price and another is product quality.

Conclusion

A follower strategy can be very powerful for some companies. It allows the company to produce good UX with a small budget. However, the follower strategy is not for everyone so make sure you analyze the industry and company before deciding to apply it. It is also important that you do not confuse a follower strategy with providing a poor UX. It only means you might have a bit lesser UX than the leaders in the industry.

© David Juhlin and www.davidjuhlin.com, 2016

Can UX create a sustainable competitive advantage?

In my opinion, I don’t think sustainable competitive advantage really exists, so the answer is no. More accurately, it exists according to the following definition:

Sustainable competitive advantages are company assets, attributes, or abilities that are difficult to duplicate or exceed; and provide a superior or favorable long term position over competitors.”

How long is “long term”? From the evolution of economy is that the “long term” time frame is becoming shorter and shorter. According to Professor Richard Foster from Yale University, a company’s average time on the S&P500 is about 15 years today, in comparison to 67 years in the 1920s (http://www.bbc.com/news/business-16611040). This indicates the competitive advantages are sustained for a shorter period today than about 100 years ago. If the timeframe of competitive advantage becomes shorter and shorter, is any advantage really sustainable?

Keeping up with the future

The more that technology advances, the faster the competitors catch up. Therefore, the only way to create a competitive advantage is to evolve faster than the competitors. In other words, instead of relying on sustainable competitive advantage, innovate a newer advantage that the competitors will then need to catch up on.

Because of this, I don’t think UX, Design Thinking, Lean Start Up, or any other competency can generate “sustainable” competitive advantage. Instead, I believe these competencies can generate an advantage until competitors catch up with the competency. In the same way, enhancing the work environment by offering childcare in the facility, free food, or utilizing the 80/20 time model (where 80% of the employees’ time is used to work on projects assigned to the role and 20% of the time is dedicated for the employee to work on a project of their choosing) can lead to happier employees, with better work morale who will work harder and have a personal investment in the company’s growth. Still, these advantages may only be temporary, as competitors who apply the same models may have similar results.

UX is a part of today’s advantage

Forester research have done research showing that customer experience (basically the same as user experience according to Don Norman’s definition) is an important driver of companies’ revenue and can function as a determinant to revenue growth among companies in an industry. Based on this, I can say with confidence, that UX is an advantage for today and will be important in the future as well, but I cannot say a company investing in UX today will sustain that competitive edge in five years.

The company of the future

So how does a company make sure to evolve faster than their competitors? I believe it consists of three steps: extract ideas, nurture the ideas, and evaluate harshly.

Extract ideas
Promote and encourage ideas from where ever they may come. It doesn’t matter if it is the CEO or the intern, make sure the company can foster a culture that extracts and respects these ideas from everyone. In the same way, it does not matter if specific methodologies are used such as The Lean Startup, Design Thinking, or something else. Also, these ideas can be anything from a new revolutionary service or very basic, such as how the scrum meeting can be run more efficiently.

Nurture ideas
Whenever an idea emerges, make it a priority that the organization look into it. This should be done even if the idea is completely irrelevant to the core business and outside their comfort zone. An idea that is not entirely consistent with expectations of one company can be the beginning of a collaboration with another organization.

As the idea has emerged, make sure to protect it and nurture it so that there is a chance for it to evolve before critically evaluating it. I am not saying to keep a bad idea around for a long time, but allow it to live for a little. You don’t need to build anything, but make sure to talk to different employees about it and see how they think it can flourish into something stronger. At this point it can also be beneficial to detach the “founder” of the idea and to make sure it becomes an idea of the organization. This will help it grow and possibly morph into something better than what the “founder” had in mind. In addition, this will help evaluate the potential of the idea by assessing others’ interests in being a part of its growth.

Evaluate harshly
Once the idea has grown just enough to sustain some criticism, make sure to put it to the test and be brutal. At this point, you want to make sure you don’t waste resources on a poor or even mediocre idea. You want to be able to focus the maximum amount of resources to the great ideas. If the idea passes the “good on paper” state, the next step is to keep on evaluating it harshly throughout the project.
Begin to solve the most challenging task first. If you can’t solve the most challenging task, there is no reason to solve the others. As an example, back when the space race occurred, the most important thing they had to solve was to be able to launch something into space. It would not have mattered if they had been able to design a space suit if they could not get a rocket up into space.

Conclusion

User experience is currently providing a great competitive edge, but we don’t know for how long this will last. Because of this, it is important for companies to evolve faster than their competitors. My suggestion is to focusing on extracting ideas, nurturing them, and evaluating them harshly.

Just remember that sustainable competitive advantage does not really exist. Hence, my suggested approach (of extracting ideas, nurture ideas, and evaluate harshly) also needs to evolve to maintain a competitive edge in the future.

© David Juhlin and www.davidjuhlin.com, 2016

Agile user experience challenges

Bringing user experience into an agile development process can be challenging, and at this point there is still no cookie cutter formula for implementing it successfully. It is very tempting to believe this formula exists, especially when attending a conference and some presenters speak about how they successfully incorporated UX into the agile process. The reality of integrating user experience in to an agile development process is challenging and it is not done overnight. In this post, there are a few thoughts to consider.

Diana DeMarco Brown’s article “Five Agile UX Myths” posted in Journal of Usability Studies (http://uxpajournal.org/five-agile-ux-myths/) highlights many important points. In my opinion, the most important point was how there are multiple ways to do agile UX and just because the “one sprint ahead” works for one organization, it may not work for others. I think the best thing to do is to gain inspiration from other organizations, and then try different approaches to find out which way works best for your unique situation. To make the transition successful it can be good to be prepared for different issues and problems that may arise. Here are my top 3 things to keep in mind:

  1. UX sprints works fundamentally different than development sprints
  2. Upfront work is important for both UX and developers
  3. User research can still be done even if you move at the speed of light

UX sprints work differently

Sophia Voychehovski, brings up an important point in her UX week 2013 presentation (https://www.youtube.com/watch?v=bbPTbN4Q_pw). Her point is that development teams normally split their work into sprints according to functionality (see picture to left), while UX sprints usually cut across functionalities as the fidelity of the design improves with each iteration (picture to the right).

Image showing how development sprints are split into features while UX sprints are split into fidelity level

The reason for this mismatch is that design is approached holistically to make sure the different elements fit with one another across different areas of the design. If the design process is forced to work in development sprints, inconsistencies and suboptimal interactions can occur between different parts of the system. This could cause inconsistency, if one feature might be optimized for the first function, and later on as the next functionality is built, some parts need to be reused (to maintain consistency). However, to support both functionalities the feature may need to be tweaked a bit. Now that tweak has to be in the backlog (on a “to-do” list) of changes for the first functionality. As the process goes on, the backlog will grow even more.

One way to overcome this issue is to allow designers enough time in the beginning of the project to get a holistic view of the system (can be low fidelity). Once they have the overview of the system they can be much more effective working in the developer sprints and most likely decrease the backlog.

Upfront work is important

Many agile projects don’t want any upfront work since that is the “waterfall method” (which is the devil himself). Once the project starts the team has some planning time to create an overview of the project and the product they are creating. The UX project also needs this planning time, the difference is that the UX project often needs a longer planning and exploratory phase than the development team. Unfortunately, most of the time everything has to happen according to the development team’s timeline, so the UX team is super rushed and may not have enough time to prepare and do proper user research.

With incremental improvements of an old system this issue may not be as severe. If only minor tweaks are required, the UX designers already have a holistic view and can therefore jump right in to the development sprints with ease. So, the primary factor for determining the magnitude of this issue is how drastically the system will change.

One client I worked with was both the main UX person in the project as well as the project manager. His general approach was to create a high level design and discuss it with his development counterpart, before a project kicks off. This ensured that they both got a clear estimate of the development possibilities and the effort required for the project. Once they were done with this general planning, they took it back to management for approval of the project. As they presented the project they were able to provide more accurate estimates. (It can be hard to work in this method if you have internal billing, because if the project is not approved no one will pay for the upfront work).

As the project kicks off, he did not disclose to the rest of the team he had already created an overview of the design. Instead, they only discussed use cases and potential issues. He purposely stayed away from discussing solutions, since he did not want the engineers to start focusing on technologies and lock themselves into narrow thinking. After they all seemed to agree about use cases, issues, and features to include, he revealed the design and asked what changes would need to be made to deliver what they discussed. After the team made tweaks, they all had a high level overview of the system. As they started to work in their sprint, everyone understood how the different parts would come together and be presented to the end users in a cohesive way. This method also helps facilitate discussion between developers and UX professionals and enables the developers to provide good interaction ideas and be a valuable asset in the UX process.

Another company handled the upfront work in a completely different way. They included the developers in the upfront UX work. This company worked in tight teams so during the research and design phase, the developers worked alongside the UX lead and became her assistant. This allowed the developers to help develop test scripts, design concepts, etc. and once it was completed they set off to start implementing the new solution. This way of working has many benefits. For example, the developers have a better understanding of the users, they need less clarification regarding the design, and they will have an easier time communicating if any changes are needed.

User research can still be done

Some UX designers who are working in sprints may feel as if they don’t have time for everything. They need to develop designs for the next sprint at the same time as they are answering questions and making sure the current sprint’s design is implemented correctly. Unfortunately, since they don’t have enough time, they sometimes have to sacrifice the inclusion of the user (interviews, usability tests, surveys, etc.).

The best way to solve this issue would be to split up the workload and have one UX designer and one UX researcher. The researcher can set up all research, conduct the research and debrief the designer (or the whole team) in the end. If in-person research is conducted, the key thing to keep in mind is that the researcher will need to plan and schedule participants before they know exactly what the state of the design artifact will be available.

Another solution is to rely heavily on online tools and conduct all research online. Some benefits of online research include rapid turnaround time for participant recruitment, and many of the tools provide good analysis capabilities. If online tools are the solution, make sure to still include a final test, which is conducted in-person. It is important to conduct the final in-person test because many of the panels consist of professional test takers, who tend to be more computer-savvy and overly positive toward system/product, which could skew your research.

Final words

Independent of how you are planning to implement agile UX in the workplace, expect the need to iterate on the process since it will not be perfect from the start. It is also important to try different methods and critically evaluate what worked and what did not work, and how you can improve the process of becoming more agile.

© David Juhlin and www.davidjuhlin.com, 2016

Outsourcing vs. in-house

In general, there is a trend among many companies to outsource more work, but user experience seems to go against this trend. Instead, companies are bringing more UX in-house. Why is user experience brought in-house, while other functions are outsourced? In this article I’ll try to highlight a few key factors companies consider when making these decisions.

How important is user experience?

The basic principle in deciding if a function should be outsourced or not depends on how important the competency is in order for the business to stay competitive. The more important functions should be kept in-house, while the less important functions should be outsourced. This competitive focus can be broken down into two factors:

  1. How important is user experience in the industry? If UX is not that important in the industry, it might be a good idea to consider outsourcing.
  2. If UX is important in the industry, is your company the leader? If you are the leader, you should consider keeping the UX in-house.

The simple reason for keeping functions with superior knowledge/processes in-house is that you want to make sure this knowledge does not leak out to competitors so you maintain your competitive edge. If you outsource, there is a risk some knowledge is being transferred to others.

For example, Ecco produces and sells shoes. One of the core principles of the company is their focus on high quality. Because of that, they keep their superior leather production (upper part of the shoe) and high pressure molding technique (to produce the bottom of the shoe) in-house. If they outsource these to a supplier, Ecco would have to train the suppliers to be able to produce at their quality level. Once the suppliers learn this higher standard of production, how are they supposed to work with other shoe companies (one supplier often produces shoes for many different brands)? Should they somehow “forget” the better methods? This is very unlikely. Therefore, outsourcing these processes to a supplier would result in Ecco’s superior processes leaking out to the competitors. On the other hand, Ecco does not have any special competencies when it comes to producing other types of shoes such as flip-flops, so it would make perfect sense to outsource these. The supplier may have more competency and gain new knowledge as they work with multiple shoe companies.

So, if your company, for example, has built up superior procedures around ideation, make sure you keep it tight to your company. On the other hand, if you don’t have any specific processes around validation, make sure you outsource it to gain high quality results from consultants.

Even if UX is not that important in your industry or your company is not the UX leader in the industry, there are circumstances where you should still keep UX in-house. An example is if your company has built up a strategy where you copy best practices from the UX leaders in the industry. By taking this approach, the company has probably created unique processes that efficiently copy these best practices. Therefore, the company should make sure other competitors using the follower strategy do not gain access to this competitive knowledge.

Other factors

Apart from this main high-level approach, here are some other factors to consider:

  • What is the demand? If there is a variable demand, it might be better to outsource the activity so you transfer risks associated with idle capacity. For example, if your business usually has a variable demand of user experience resources due to project schedules etc. it might be a good idea to outsource.
  • Can pooling create benefits? If you and other companies outsource, the supplier might be able to gain cost advantages by implementing large scale operations. For example, Android is used on multiple smart phones models.
  • Can quality be maintained? If your company has created high quality standards, it can be hard for the company with which you choose to outsource to maintain them. For example, if you outsource the design, they might not include the sufficient validation steps throughout the process in order to cut costs.
  • What is in the future? If you have it in-house and decide to outsource, will you ever need to bring it back in-house? For example, if you decide to outsource design, you might let some of your designers go. If you then later on decide to bring the design back in-house it might be difficult to build up this capability again.
  • Are your strategic goals to become a leader in UX? If you want to be a leader, you should keep the UX in-house so you can build up a superior competency.
  • Does your current UX division have the necessary skills? If they don’t have the skills and it is only a one-off project, you might want to outsource it. If it on the other hand is something that is recurring, it would probably be better to acquire this skill.

Conclusion

So why is UX going against the trend? I believe it is because more and more companies understand how important UX is to stay competitive. This leads to inclusion of UX in more projects, which in turn increases the demand of UX in the organization. Therefore, even if there would be a variable demand of UX in the organization, the overall demand is growing, so no UX person is ever without work or the potential to take on additional UX work. In addition, it is hard to find cost savings since pooling is rarely an option, largely due to each company wanting to have their unique look and feel that correlates with their brand.

It might be beneficial at times to outsource UX, especially if there are one-off projects and no competency exist in-house, or if specialized competency is needed in a project. If you do outsource, it is important to still have knowledge in-house to make sure you are able to evaluate the suppliers and the quality of their deliveries.

© David Juhlin and www.davidjuhlin.com, 2016

Inside-out vs. outside-in strategy

A company’s strategy can be driven either by internal or external factors. Even though it usually consists of a mix, the strategy usually tends to put more focus on one than the other. The model I use primarily focuses on the three lower levels in my Levels of UX Strategies framework: Company, UX division and project.

inside out_outside in_V2

Inside-out companies

These companies usually look at their internal resources and capabilities then try to find a way to leverage them to reach their business goals. The analysis they use can be Porter’s five forces, SWOT, etc. and from these form a strategy that leverages their strengths and downplays their weaknesses. As they go through analysis they might also identify areas of improvement in order to execute their desired strategy.

For example, a company might create a never-before-seen chemical composition. After discovering it, they have to come up with a utilization of this material in order to monetize it. University spinoffs are a good example of this type of company.

Outside-in companies

Outside-in companies on the other hand start by trying to identify what problems the customers have, then try to figure out how to solve it. After conducting marketing/user research, they might conclude that their customers want a certain product or service to fulfill their needs. Then they try to figure out how they can deliver that product or service to their customers. They might also be looking at competitors and world events that might provide ideas of how to better serve their customers.

For example, Amazon has realized free shipping and rapid delivery are important to customers, so they are continuously trying to improve the delivery time while keeping shipping costs low. Amazon did not have experience with alternative shipping methods such as drones, but they realized it would be a crucial step to deliver packages rapidly so they acquired this competency to satisfy their customers.

Basically, an outside-in company looks for ideas outside of the company, while inside-out companies look within the company.

Considerations at the company level

It might be easy to jump to the conclusion that it is better to be an outside-in company, but don’t be too quick to judge. In the events when customers don’t know what they want, the outside-in company might make the wrong conclusions. For example, would a hotel customer have verbalized they wanted a service such as Airbnb? Or would the cell phone customers have told Apple they wanted Appstore before it was built? These type of innovations usually have to come from ides within the company (or requires an organization with a very high design thinking maturity).

You can also run in to the problem with conflicting “wants” from customers. For example, if Southwest airlines finds out that passengers want to be served lobster on their flights, should they start to serve the lobster? It is true that the customers want it, but they also want a cheap flight. Since Southwest knows their cheap flights are of more value to customers than gourmet meals, the lobster is a “want” they should ignore.

As you can see, it is extremely important for outside-in companies to interpret the research accurately and to understand customers’ underlying desires and how they stack up against each other. This is a very hard task and giants such as Coca Cola made a tremendous fail when they introduced “New Coke”.

I can’t say that one or the other strategic choice is better than the other, but the important thing is that the mix blends well with other strategic decisions that the company makes.
The reason it is important to understand if the company is an inside-out or an outside-in is because it will influence the role of UX within the company. For the companies leaning towards an outside-in strategy, UX can take a more central role and bring new insights and ideas that can lead to initiation of new projects. On the other hand, companies that lean towards an inside-out strategy, the UX role is more as a supportive function that has a limited ability to drive change. Also, within the inside-out company, it might be hard to sell research or design that is based on insights gained from competitors since the culture are more focused on the internal parts of the company.

UX Division

When looking at the inside-out/outside-in scale for the UX division level, it is more about how the UX processes within the division are set up. An inside-out division has more of a focus on building their own methodologies for design and research, while the outside-in company have more of an inclination to search outside the company for inspiration of methodologies.

As an example, let’s say a UX division realizes they need to work in a more agile way. The inside-out division would look inside the company and might notice the developers are using scrum (an agile development method) and then decide to send some staff members to scrum training. This training might even be provided internally from someone in the development team.

On the other hand, the outside-in UX division might send a person to a conference in order to learn how other UX divisions successfully implemented agile methods. Afterwards, they decide if they should use scrum or some other agile method. Once they decide on the method, they can send staff off to third-party training.

In this example, the inside-out division would most likely implement something that works well when collaborating with developers and other divisions in the company, but might not be as efficient within the UX division. The outside-in division would instead find a method that works very well internally, but might not be as efficient when collaborating with other divisions in the company.

Further on, since the inside-out division has a tendency to build their own methodologies, they also tend to have well established processes and methods they rely on. The benefit is a more streamlined process that better predict time estimates. It will also be easier to communicate with other stakeholders that only know the very basics of UX. The outside-in UX divisions on the other hand, tend to allow designers and researchers more freedom in selecting methods and procedures. The benefit of more freedom is that designers and researchers can apply more appropriate methods if it is required.

The strategic choice between inside-out or outside-in will have an impact on the staffing of the UX division. The outside-in companies need more of the “A-type” individuals. Their employees need to be self-motivated, taking initiative, and have a broad skill set so they can apply the right methodologies for different situations. The inside-out company can have more junior employees as well as more of the B and C individuals that might not have enough self-motivation to expand their knowledge on their spare time. The reason the inside-out companies can get away with more junior employees is because they can lean on the processes to support them in their role. This result in the inside-out division being able to operate with a lower cost, not just from a salary perspective, but also since they train employees internally and might not have to send staff off to learn skills unfamiliar to the company.

An inside-out UX division is able to operate on a lower budget. It tries to maximize the value delivered through standardized procedures at the same time as keeping the cost down. Outside-in divisions can often deliver higher quality work for an additional cost. The decision regarding the mix of inside-out and outside-in strategy the UX division consist of depends on the company’s setup and what can provide the highest net benefit for the company. In other words, the UX division should strive for the mix that provide the greatest gap between the additional value created and the cost.

UX Projects

Let’s face it, most UX projects (should) involve users to some extent so it is easy to think of them as outside-in projects where knowledge is gained from participants outside the company. However, UX projects also have inside-out attributes to them. Consider this example. An online company is concerned why their shopping cart abandonment rate is high. Therefore they initiate a project that will investigate this. A UX researcher investigates it and finds out their shipping time is too long.

Another company might launch a project with the goal to see how they can improve the experience for their customers. After the UX researcher has done some investigation they find out that the customers think their delivery times are unacceptable. This example is more of an outside-in project than the first company’s project since this one starts at the user, while the first one starts from the business analytics.

So why does it matter where on the inside-out/outside-in scale the project falls? I would say that it has to do with funding. A project based on internal data (more inside-out) and a concrete problem to solve is more likely to be funded since it is easier to make a business case and gain stakeholder buy-in. I.e. it is clearer what the return of investment will be. When selling the more outside-in projects (more exploratory), the business sponsors (or someone else), whose budget it is coming from, are taking a larger risk than if they invest in a project with a narrow focus. If exploratory studies are important to the organization, one way to circumvent this tendency (to pick the safer projects) would be to provide the UX division with a budget to conduct their own exploratory projects.

Conclusion

The inside-out vs. outside-in framework is very simplified, yet all companies fall somewhere between these two extremes. Even though the framework is simple, it is worth considering where your company/UX division/projects fall and how this impacts your company.

© David Juhlin and www.davidjuhlin.com, 2016

Levels of UX strategies

UX strategies exist in many different levels and here I have tried to break it down to a framework that I find useful. Even if some of the levels overlap to some degree, there are the five main levels: Global, Industry, Company, UX Division, and Project.

Graphic representation of the 5 levels of US strategy. The 5 levels has layers similar to an onion. The furthest out is the Global level, followed by the Industry level, thereafter comes the Company level and the UX division level. Finally the furthest in is the project level.

UX strategy at the global level

On this level we need to consider how UX can impact the entire industry by interacting with other industries. For example, if the grocery store industry makes it easier for farmers to sell their crops to stores through some online system, will more farmers sell to the grocery stores instead of going to the farmers markets? This type of change would most likely increase the number of suppliers and thereby also increase the competition among suppliers, which in turn would benefit the grocery store industry. On the other hand, if all grocery stores provide this system, large farmers may start to use the tool to compare which grocery store would pay the highest price. This will result in unwanted competition in the industry that benefits the farm industry instead.

It is therefore important to understand how your company’s initiatives might change the entire industry if competitors implement the same system. If you don’t consider this level, you might unintentionally make the industry worse off in the long run. It is perfectly fine to make this type of decision that makes the industry worse off, as long as it is a part of the overall strategy and has been planned for.

UX strategy at the industry level

At this level it is important to analyze the competitor landscape and how your company stands in comparison to them. Are you providing a premium product or are you primarily going for lower costs? For example, if you manufacture Mercedes, you might need to spend more on the infotainment system than Dodge. Another important factor here is also to understand if UX is really a differentiating factor. For example, in the coal manufacturing industry, will a better experience on the website really be beneficial?

The reason you need to think about UX strategies on this level is that you don’t want to waste your company’s resources on UX when it actually isn’t that important. What if one of the coal companies would spend a lot of resources to improve their website, when sales primarily is generated through representatives? Would it not have been better to invest in providing training for their representatives or alternatively hire another representative?

UX strategies on the company level

After understanding external factors such as industry effects and your position in the competitive landscape, you are now able to start looking inside your company. At this level, you would be looking at the company’s structure. For example, should the company have an internal UX division or primarily outsource the UX activities?

This is important because you want to make sure the structure inside the company is set up to support the overarching goals. If the UX is critical for the company’s success, but the website design was outsourced. It will be hard to make smaller tweaks and continuous improvements.

UX strategies on the UX division level

The UX division level can be referred to as a functional level in other strategic frameworks. Since we are focusing on UX, I am only looking at that specific function in the company therefore labeled the UX division. At this level you need to analyze things such as processes. For example, should the researchers only be included in the end to test the design? If you have an outsource strategy, this might be enough since the company you outsource the design to should do the upfront research. Another area of consideration should be your staffing. Do you have the right people to fulfill the planned strategy?

The reason this is important is because you need to be able to execute the strategies that you set up. If the company’s direction is to be the UX leader in the industry and you only have designers or only have researchers on your team, this may present great challenges for your strategy.

UX strategy at the project level

In this model, the lowest level is the project level. Sometimes the projects are linked together into a larger project and sometime they are stand alone. This is how UX practitioner traditionally thinks about UX strategy. We try to understand the business goals and the users’ goals, and then create a UX road map. Many times the roadmap needs to be flexible, within limitations, since the project is rarely as linear as you might want. For example, you may do some initial information architecture research and you struggle to get it right (users can’t find information for a critical business goal). This might force the team to spend more time on the information architecture. In turn, this results in not being able to fit the four planned moderated usability tests due to time and/or budget. This could lead to either cuting it down to three moderated tests or conducting two unmoderated tests and two moderated.

It is important to understand UX at this level in order to maximize the UX for each project even though there are constraints (budget, time, resources, etc.). If the company can excel at this level they are off to a good start. They will be able to produce a better UX than expected of a company with similar UX spending.

© David Juhlin and www.davidjuhlin.com, 2016