Listening to your customers – Design Research in Digital Transformation

A couple of years ago I had lunch with a client who described to me what they were doing. I suggested they were involved in a digital transformation program and after a moments pause, he agreed. The term was somewhat unfamiliar to him. Fast forward two years and I don’t think the same conversation would occur. Digital transformation is in the vocabulary of every self respecting member of the C-Suite.

The rapid increase in transformation initiatives has not been an overwhelming success. Do a search for digital transformation and you will be presented with an alarming number of results focused on failure. 2, 5, 10 reasons why digital transformations fail – there are loads. To save you the trouble here are a few I like:

• Bain & Company
• IMD
• HBR
• McKinsey

As you would expect there is substantial agreement on why digital transformations fail from lack of capability, lack of strategy and lack of buy-in to poor leadership and execution. And there is also agreement that the failure is that the transformation doesn’t meet the original goals. As always the devil is in the detail.

Getting Digital Transformation Right

I particularly like this article from Bain & Company about “Orchestrating a successful digital transformation“. There is much in here that resonates but I want to focus on two areas. They talk about the Inner and Outer game. For companies to succeed they must be effective in both. Bain & Co list four questions for inner and outer game that organisations must ask themselves. And Design Research specifically addresses one in each list:

Outer game question:

• Are we tapping digital innovation to create new, distinctive experiences that give existing customers what they want and to help develop new ones?

Inner game question:

• Have we managed to extract measurable benefits from our digital investments? How many of our prototypes have actually made it to the market—at scale?

Before addressing each in turn, lets remind ourselves of what the stages of design research are:

The four stages of Design Research

We define the stages in design research as follows:

Discover

The discovery stage is about involving your customers in defining the problem. It identifies known and unknown wants & needs and broadens the problem area. Specifically it moves the problem from the tactical space to the strategic by providing context and opportunity.

Generate

With the problem space established generational research involves your customers in exploring how the eventual solution should be framed. Whilst discovery defines the problem to be solved generative research defines the experience to be delivered. It its channel agnostic and not about the interaction design which comes next.

Evaluate

Finally, you can start creating the experience. This stage facilitates innovation and creativity by evaluating concepts and prototypes as they evolve toward the final solution. Evaluation research ensures that the original problem space is addressed, that the experience that was defined is delivered and that it works.

Optimise

When live, the solution should be optimised to make sure it delivers the maximum and planned ROI. Qualitative research at this stage supports your tech stack optimisation strategies.

Now, let us return to those two questions.

Distinctive experiences

Whether we think about digital transformation at a macro, organisational level or a smaller, product level there can be a tendency to leap on the solution. The low hanging fruit of transformation lures us in. We know what is wrong and we know how to fix it so let’s just do it.

I have real sympathy with this. If you have offline processes and you know you want to bring them online it seems pretty reasonable to just ask the UX Design team to build them. But leapfrogging the discovery and generative stages is a mistake.

There are three elements to the Bain & Co questions:

1. Tapping digital innovation
2. Creating new, distinctive experiences
3. That give existing customers what they want and to help develop new ones

Moving immediately to the evaluative stage restricts the transformation to a tactical initiative. Opportunities to innovate beyond the specific issue are lost because the broader problem space is not understood. You may address the innovation and distinctive experience elements but you won’t necessarily give existing customers what they want and you may not even understand the opportunity with new customers.

Similarly, skipping the generative stage limits the solution. Generative research facilitates innovation and creativity because it defines the experience to be delivered. Rather than starting with something innovative (say augmented reality) and searching for a problem to solve, start with the problem and seek innovation.

Measurable benefits from digital investments

There are two parts to the second Bain & Co question:

• Have we managed to extract measurable benefits from our digital investments?
• How many of our prototypes have actually made it to the market—at scale?

Clearly, if prototypes are not making it to market at all, or at scale, the measurable benefits will be limited. Bain & Co posit that to be successful, organisations need to “give the team the authority to make decisions cross function”. This is because strategic digital transformation fails when it is narrow and siloed.

Design research, through the discovery phase, drives transition to be strategic and isn’t constrained by organisational boundaries. Because discovery research is the first step, it facilitates buy-in to the broader opportunity. Cross-functional teams can be established and given the authority to pursue the broader opportunity.

Generative and Evaluative research ensure that prototypes scale. Put simply, they make sure you are doing the right things, right. As part of a well structured, well organised product development process they provide the direction and the confirmation that helps teams maintain momentum.

Involving your customers

“But customers don’t know what they want”. I hear that argument a lot and that is to misunderstand what research delivers. Good research doesn’t ask a list of questions. Properly structured research answers questions and defines known and unknown wants and needs. Opening up the problem space elevates the digital transformation into the strategic and provides organisation-wide opportunities.

Design Research is a helpful tool that will support organisations that want to truly transform and utilize digital as part of that transformation. It will allow organisations that are struggling to include customers in their transformation a framework for doing so. And help those that are too tactical to become strategic.