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WHAT IT MEANS TO BE STRATEGIC (AND CREATE VALUE) Nathan ShedroCalifornia College of the Arts designmba.org nathan.com Saturday, June 14, 14

What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

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Designers are already inherently connected to strategy. They just need to know how to get into the room. Note: the talking points in the notes field isn't a full transcript. They're mostly just notes for myself while presenting.

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Page 1: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

WHAT IT MEANS TO BE STRATEGIC(AND CREATE VALUE)

Nathan ShedroffCalifornia College of the Artsdesignmba.orgnathan.com

Saturday, June 14, 14

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Saturday, June 14, 14

I come from a design background. In my case, I’m trained as an automobile designer, though I didn’t go into the industry.

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Saturday, June 14, 14

Instead, I went directly into Information Design (which, at the time, was mostly in print).

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Professionally, I grew-up in Interaction Design, working on presentations and kiosks in the late 80s, CD-ROMs and application interfaces throughout the 90s, and LOTS of websites starting in 1994. These are merely a fraction.

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M A K E I T S O Interaction Design Lessons from Science Fiction

b y N AT H A N S H E DR OF F & C H R I S TOP H E R NOE S S E L

foreword by Bruce Sterling

Many designers enjoy the interfaces seen in science fiction films

and television shows. Freed from the rigorous constraints of designing

for real users, sci-fi production designers develop blue-sky interfaces

that are inspiring, humorous, and even instructive. By carefully studying

these “outsider” user interfaces, designers can derive lessons that make

their real-world designs more cutting edge and successful.

“Designers who love science fiction will go bananas over Shedroff and Noessel’s delightful and informative book on how interaction design in sci-fi movies informs interaction design in the real world. . . . You will find it as useful as any design textbook, but a whole lot more fun.”

ALAN COOPER“Father of Visual Basic” and author of The Inmates Are Running the Asylum

“Part futurist treatise, part design manual, and part cultural analysis, Make It So is a fascinatinginvestigation of an often-overlooked topic: how sci-fi influences the development of tomorrow’s machine interfaces.”

ANNALEE NEWITZEditor, io9 blog

“Shedroff and Noessel have created one of the most thorough and insightful studies ever made of this domain.”

MARK COLERANVisual designer of interfaces for movies (credits include The Bourne Identity, The Island, and Lara Croft: Tomb Raider)

“Every geek’s wet dream: a science fiction and interface design book rolled into one.”

MARIA GIUDICECEO and Founder, Hot Studio

www.rosenfeldmedia.com

MORE ON MAKE IT SOwww.rosenfeldmedia.com/books/science-fiction-interface/

MAK

E IT SO

by NATH

AN SH

EDR

OFF &

CHR

ISTOPH

ER N

OESSEL

Experience Design 1.1a manifesto for the design of experiences

by Nathan Shedroff

product taxonomies 16

user behavior 116

100 years 22

information 42

takeaways 28

data 36

knowledge 48

subjectivity 78

consistency 96

navigation 84

product taxonomies 16

user behavior 116

experiences 4

experience taxonomies 10

100 years 22

wisdom 54

information 42

takeaways 28

data 36

knowledge 48

subjectivity 78

consistency 96navigation 84

Design Strategy in ActionEdited by Nathan Shedroff

A publication from the MBA in Design Strategy programCalifornia College of the Arts

2011

2008 Edition

Dictionary ofSustainable Management

Saturday, June 14, 14

I’ve written, designed, and contributed to a lot of books (mostly on some aspect of design). These are the most important, though not all.

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Saturday, June 14, 14

In 1996, I started working on experience, brand, online, and corporate strategy for a variety of companies, mostly in online ventures. This opened-up a new set of understandings for me about the product/service work I did—so much so that in 2006 earned an MBA.

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MBA IN DESIGN STRATEGYMBA IN STRATEGIC FORESIGHTMBA IN PUBLIC POLICY DESIGN

Saturday, June 14, 14

Designer (industrial, information, interaction, experience) turned business consultant and strategist, now, an educator. I’m here to share how we teach experience, value, design, and business today to our degree and executive students.

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VALUE

Saturday, June 14, 14

You can’t talk about strategy without talking about value and I don’t believe we don’t talk about value in the right ways in business, and as people from the more design-oriented side of business, it frustrates us, trying to get our points across.

We are constantly struggling with the idea of value and how its measured. Mostly, it’s that we don’t know how to measure a lot of value—and the most important value.

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CLV = GC • - M •∑i = 0

n

(1 + d) ir i ∑

i = 1

n

(1 + d) i - 0.5r i - 1

Lifetime Customer ValueGC = gross contribution per customer

M = (relevant) retention costs per customer per year

n = horizon (in years)

r = yearly retention rate

d = yearly discount rate.

EXPERIENCE CREATES VALUE

Saturday, June 14, 14

Economists resort to attempts like these to prove that relationships are important to business (how did we get to the point where this is a revelation?). create real value: Companies have been trying to assess this value for a long time.

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Brand Value = { (V/S)b - (V/S)g } * Sales(V/S)b = Enterprise Value / Sales ratio of the firm with the benefit of the brand name(V/S)g = Enterprise Value / Sales ratio of the firm with the generic productLet's use as an example branded cereals maker like Kellogg (K) against a generic provider like Ralcorp (RAH).Value of Kellogg brand name = (1.78 - 1.32)(13846) = $6,369 MillionThus, (6369/24200) or 26% of the value of the company is derived from brand equity.

EXPERIENCE CREATES VALUE

Saturday, June 14, 14

But none of these methods get at the total value, partly because they’re all focused on the quantitative—only the things that can be measured.

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Other Metrics:• Booz & Co Global Innovation Study (2012)• Forrester’s Customer Experience Index• UK Design Council• BusinessWeek Index etc.

DESIGN CREATES VALUE

dmi: futurED

company 2011 $bb

rank % of sales

1 Apple $2.4 53 2.2%

2 Google $5.2 26 13.6%

3 3M $1.6 86 5.3%

4 Samsung $9.0 6 6.0%

5 GE $4.6 30 3.2%

6 Microsoft $9.0 5 12.9%

7 Toyota $9.9 1 4.2%

8 P&G $2.0 72 2.4%

9 IBM $6.3 17 5.9%

10 Amazon $2.9 48 6.1%

“…The ten most innovative companies outperformed the top ten R&D spenders on all financial metrics.”

Booz&Co Global Innovation Study 2012

And 9 out of 10 are DMI members

Saturday, June 14, 14

But none of these methods get at “total value,” partly because they’re all focused on the quantitative.

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Instagram

Saturday, June 14, 14

Let me use an example. Last year, in 2012, Facebook bought Instagram for how much money?

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Instagram

$1.1B

Saturday, June 14, 14

$1.1B. Now you might argue that Facebook overpaid and that’s their business but they still did so because it was valuable to them. But, how did they calculate that value? How would you? For example, what was their book value?

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Instagram

~$50M

Saturday, June 14, 14

No one who wasn’t part of the deal knows for sure but I’m betting it was around $100K. Even if you count the money investors put into the company, it was only a few million.

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Instagram

$1.05B

~$50M

Saturday, June 14, 14

So, what accounted for the other $1.05B in value? It was the relationships they had created with customers.

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Pixar

$2.27B

$1.97B

Saturday, June 14, 14

(Disney)

They’re not the only ones. This is a regular phenomenon with companies—especially creative ones (but not only).

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Nextel

$29.7B

$5.3B

Saturday, June 14, 14

(Sprint)This is clearest when companies are bought but it’s true of companies at any point in their lives.

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“GOODWILL”

BOOKVALUE

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“Book value” or “fair value”

In the business world, we don’t so don’t know how to measure this, nor account for it, so we call it “goodwill.” In accounting, we can’t even call it an “intangible asset” and what could be less tangible? In financial terms, it only sort of exists because we don’t really know its value until, after the fact. We can only estimate and hope others agree. Investors, of course, know this (and count on it) but they have no way to work it with except intuition or accident (two of the most underrated business drivers). Now, I’m simplifying a bit but ONLY a bit.

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BRAND VALUE

BOOKVALUE

Saturday, June 14, 14

In the brand world, we call Brand Value but that doesn’t account for everything taht’s happening either, it’s just a convenient placeholder for what’s going on.

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Instagram

$1.05B

~$50M

Saturday, June 14, 14

But, look again at the numbers. Which is the number worth focusing on? ALL the best value is “off the books.” This is true of many, many companies—any with a strong brand, any with strong relationships, any that deliver value that is off the books. And, this isn’t just a phenomenon of B2C firms. So, our definition of value (not to mention our curation of it) is really deficient.

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TOTALVALUE

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If we add these values together we get the actual total value of a company—one that better reflects the relationships with customers (and shareholders).

Businesses know that this value exists but because they can’t measure it easily (and they’ve been told to only “look at the numbers” for many decades), they don’t know how to build it. That’s where we come in.

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FUNCTIONAL VALUE+ FINANCIAL VALUE+ EMOTIONAL VALUE+ IDENTITY VALUE+ MEANINGFUL VALUE= TOTAL VALUE

Saturday, June 14, 14

So, here is what I’ve learned about Total Value. There are at least 5 types of significant value that contribute to Total Value.

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TOTAL VALUE

QUANTITATIVE FUNCTIONAL VALUE+ FINANCIAL VALUE+ EMOTIONAL VALUE+ IDENTITY VALUE+ MEANINGFUL VALUE=

Saturday, June 14, 14

This is the value most business people see. Some of this value is more quantitative, for which businesses have traditionally focused upon.

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TOTAL VALUE

QUALITATIVE

FUNCTIONAL VALUE+ FINANCIAL VALUE+ EMOTIONAL VALUE+ IDENTITY VALUE+ MEANINGFUL VALUE=

Saturday, June 14, 14

Much of this value is quantitative, for which businesses has traditionally ignored. In fact, this is where the highest, more interesting, and most fulfilling value is.

This is traditional business’ blindspot!

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TOTAL VALUE

PREMIUM VALUE

FUNCTIONAL VALUE+ FINANCIAL VALUE+ EMOTIONAL VALUE+ IDENTITY VALUE+ MEANINGFUL VALUE=

Saturday, June 14, 14

Much of this value is quantitative, for which businesses has traditionally ignored. In fact, this is where the highest, more interesting, and most fulfilling value is.

This is traditional business’ blindspot!

Business strategy has mostly focused on only the first two kinds, as well. And, as we’ve seen in the past, you get what you measure. If you don’t know how to measure it, it doesn’t get prioritized—but that doesn’t mean it isn’t important.

These are the decision drivers of customers:Remember Instagram (or a zillion other companies).

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THOSE COMPANIES (AND PEOPLE)

WHO FOCUS ON TOTAL VALUE

CREATE MORE OF IT, MORE OFTEN

Saturday, June 14, 14

Another way to say this is...

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THOSE COMPANIES (AND PEOPLE)

WHO FOCUS ON PREMIUM VALUE

CREATE MORE OF IT, MORE OFTEN

Saturday, June 14, 14

And who is good at developing Premium value?...

(you all are)

Ok, so far, are you with me?

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QUALITATIVEVS.

QUANTITATIVE

Saturday, June 14, 14

And, in order to do so, we have to better understand the Qualitative—much better. The business world has been notoriously bad at understanding and valuing the qualitative. To hear most businesspeople and business professors explain it, “people won’t pay more for the same functional value.” But, try telling that to a sales person. They know better. If this were true, most of us in this room wouldn’t be in business. Neither would Cartier, or Porsche, or Beats by Dre.

We really understand the qualitative. We feel it in our bones. But, we’re often the ones that don’t focus or even “get” the quantitative. In fact, many of us don’t trust numbers. Oh, they’re fine for engineering calculations but we just know that there’s more to the story than the numbers tell and all of the best parts of the experiences we like to create fall outside the story told by just the numbers.

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QUALITATIVEAND

QUANTITATIVE

Saturday, June 14, 14

For us, we can’t ignore the quantitative. This is what designers excel at. Both are necessary and we need to become comfortable with the quantitative as well as help our peers become comfortable with the qualitative. For now, we have to do the work on both sides.

(Story of CEO, designer, and VP marketing).

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TOTAL VALUE(RELATIONSHIPS)

Saturday, June 14, 14

Relationships are the only way that value exists. It emerges dynamically, in the context of a relationship—all relationships including personal ones). And, it’s bi-directional.

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TOTAL VALUE(RELATIONSHIPS)

Saturday, June 14, 14

And, it’s bi-directional (something we sometimes forget).

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TOTAL VALUE(RELATIONSHIPS)

NEEDSOFFER

INTENT

EXPERIENCESaturday, June 14, 14

A few things to remember about Value: It is emergent. You don’t decide on value. You can propose it (which is why we have value proposition) but because much of the most important value is invisible, you can only plan for and create the conditions for value to be exchanged but you can’t “make” it. This is why Experience is so important.

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TOTAL VALUE(RELATIONSHIPS)

Saturday, June 14, 14

Value is dynamic. It is changing all of the time. Most businesses are bad at dynamic situations because plans are hardly ever designed to be dynamic. Most strategy isn’t designed to be dynamic. That’s a problem.

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R IE EP

XE

NCE

TOTAL VALUE(RELATIONSHIPS)

Saturday, June 14, 14

Value is only exchanged within an experience. Experiences govern the value we create. And, we all create experiences, whether we think we do or not. I’ll come back to Experience in a moment.

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VALUE EMERGESWITHIN EXPERIENCE

Saturday, June 14, 14

This is probably a more accurate way to describe it. It’s not easy and it’s not as deterministic as “experiences create value” but its not so off that we can’t use that phrase.

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YOU’RE IN THE RELATIONSHIP

BUSINESS

Saturday, June 14, 14

And so are your clients, partners, peers, etc.

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EXPERIENCE CREATES VALUE

Saturday, June 14, 14

Let me give you another example of this...The iPod went on sale in 2001 but sales didn’t really take-off until 2004. The iTunes Store opened in April of 2003 and this is what caused Apple’s fortunes to start turning.

This is when the “market” decided that Apple wasn’t a niche computer company, it was the predominant digital music company. That’s what made the stock take-off. (there’s a split there in 2004, BTW). The iPod changed everything for Apple and it was almost an accident. At the very least, it was a curiosity, not a strategy.

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EXPERIENCE CREATES VALUE

Saturday, June 14, 14

So, the iPod became big business for Apple but the company but, around this time, it noticed something interesting about people’s behavior. (people only want to carry about three things in their pockets): keys, wallet, plus one more (iPod? camera? mobile phone? gaming device?). More often than not, that third thing was a mobile phone. Apple realized it had to do something or it would begin to lose this new-found market. It needed to get into the phone.

This wasn’t based on market research. It was based on an observation about the experience people had in the world.

Does anyone remember the first Apple phone?

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EXPERIENCE CREATES VALUE

Saturday, June 14, 14

On September 7, 2005, Apple and Motorola launched the ROKR. You don’t remember it because it flopped. Apple knew how difficult phones were (and that they had no expertise). They didn’t want to be a phone company. So, the partnered with the manufacturer of the best and most popular phones in the USA (the markers of the RAZR).

This was a strategic decision: we aren’t a phone company.

When the ROKR flopped, Apple had to change it’s strategy. It decided to become a phone company—even though it didn’t particularly want to.

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EXPERIENCE CREATES VALUE

Saturday, June 14, 14

It wasn’t until June 29, 2007 that Apple shipped it’s first iPhone.

It changed everything—for Apple, for customers, and for the industry.

In order to develop and ship what it thought was possible (and preferable), Apple had to become a different company. And, this was all based on an observation about customer experience, behavior, and preference.

This would not have emerged from traditional, quantitative market research. The most valuable part of Apple’s entire business is based on a qualitative observation about how people live—just like Instagram.

That’s the power of the qualitative and we use—you use—qualitative research techniques to understand what’s going on.

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EXPERIENCE IS STRATEGIC

Saturday, June 14, 14

This makes experience strategic: which means design and architecture, are incredibly important. They provides the basis and context for understanding and delivering value. Value emerges from the experience delivered.

The better the experience, the better the relationship, and the better the value that emerges.

When it comes to do it, we facilitate relationships, strategy is about which relationships we should care most about and how to enhance them.

We have to help our peers and partners see, value, and understand relationships.

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DESIGN IS STRATEGIC

Saturday, June 14, 14

This also means that Design is strategic (since design is the process of creating experiences).

Ok, still with me?

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STRATEGY

Saturday, June 14, 14

Strategy is a word thrown-around in business a LOT and it means different things to different people. Sometimes, it’s used as a way to one-up others in a company (as in “that’s really just a tactical suggestion, we need to be strategic”).

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Strategy

(Greek “στρατηγία”—stratēgia, “art of troop leader; office of general, command, generalship”[1])is a high level plan to achieve one or more goals under conditions of uncertainty.

Strategy is also about attaining and maintaining a position of advantage over adversaries through the successive exploitation of known or emergent possibilities rather than committing to any specific fixed plan designed at the outset.

—Wikipedia

Saturday, June 14, 14

Here’s a more official definition, from Wikipedia

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“a pattern in a stream of decisions”

— Henry Mintzberg of McGill University

Saturday, June 14, 14

Not much more helpful, eh?

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Strategic management analyzes the major initiatives taken by a company’s top management on behalf of owners, involving resources and performance in internal and external environments.[1] It entails specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Recent studies and leading management theorists have advocated that strategy needs to start with stakeholders expectations and use a modified balanced scorecard which includes all stakeholders.

Saturday, June 14, 14

Blah, blah, blah.

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Strategic management analyzes the major initiatives taken by a company’s top management on behalf of owners, involving resources and performance in internal and external environments.[1] It entails specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs.

Saturday, June 14, 14

Notice, though, who the protagonists are in this narrative... “on behalf of owners”

Where are customers, citizens, or even users?

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STRATEGY ISA HIGH-LEVEL PLAN

(FOR ACTION)

Saturday, June 14, 14

Really, all strategy is, is a plan--but a high-level plan.

Product strategy is higher-level than product design. But, technology strategy may be higher still (and end-up driving many product strategy decisions). Marketing strategy and corporate strategy are higher, still.

But, if it’s just a plan, than why is it such a big deal? (We make plans all of the time, right?)

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“DESIGN ISA PLAN FOR ACTION”

Charles Eames

Saturday, June 14, 14

Coincidentally...

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STRATEGY ISABOUT CONTEXT

Saturday, June 14, 14

The main difference between strategy and tactics is simply context--your organization’s, it’s competition, it’s markets and industries, and the rest of the world around it.

And, not everyone in an organization is good at context. To be successful, you need to b able to see both, jump between the two, and know which conversation is happening when—and why.

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TACTIC

STRATEGY

Saturday, June 14, 14

There are a lot of parallels between strategy and UX.

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TACTIC

Usability

STRATEGY

Saturday, June 14, 14

Usability is a tactic.

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TACTIC

UsabilityDesign (Craft)

STRATEGY

ExperienceDesign (Strategy/“Thinking”)

Saturday, June 14, 14

Experience is a strategy.

There are a lot of parallels between strategy and UX. When people in a company talk about usability, they’re talking about features. However, when you talk about experience, you’re talking about relationships—something much more valuable.

But, as you know, experience (or even usability) isn’t possible to improve unless it’s supported by the organization’s strategy.

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TACTICOperational Effectiveness & Productivity

Products & Services (Offerings)Features/Performance

Price

STRATEGYIntent, Goals, Mission, Vision, & Culture

SystemsStakeholders (employees, investors, media,

communities, etc.)

Saturday, June 14, 14

Some more things that are strategic or tactical...

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TACTICHow to make, deliver, and support the best

<offering> possible

STRATEGYWhat we should be in the business of

(to begin with)

Saturday, June 14, 14

What this really boils down to is...

Page 56: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

TACTICHow to make, deliver, and support the best

<offering> possible

STRATEGYWhat we should be in the business of

(to begin with)

THE ORGANIZATION

THE OFFERINGSSaturday, June 14, 14

Or....

Now, I know that many of you may shy away from dealing with company issues. You went into product development because you care about creating great things for people. Right? Getting mixed-up in the day-to-day management details is just a distraction, right?

Right. How many of you have ever had this happen to you (raise your hands and keep them up): you get the product brief and it gives you a sinking feeling: this isn’t the right thing! This isn’t enough! No one needs this! This doesn’t serve our current customers! We can’t yet go after these new customers! etc.

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YourCompany

customers (end users)

NGOs

media

community (geographic)

partners

labor unions

retailerslocal government

wholesalers

the Environment

industrytrade

associations

employees

distributors

regional government

courts suppliers & manufacturers

insurers & reinsurers

shareholdersbanks

investorsinstitutional investors

competitors

YourCompany

customers (service

providers)

Saturday, June 14, 14

The first way you build context is to get to know your many stakeholders—not merely shareholders. Traditional business strategy ignores all but those who own shares in the company or, begrudgingly, it might include employees.

We know better now. All of these stakeholders can create trouble or opportunity. And, the very same techniques we know that helps us understand what really drives our customers, can help us understand what rally drives them. (in other words, we’re already good at this)

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STRATEGY TOOLS

Saturday, June 14, 14

Speaking of traditional business strategy, let’s talk briefly about some of the common tools.

How many of you have heard of a SWOT analysis? How many have helped create one?

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Strengths Weaknesses

Opportunities Threats

Saturday, June 14, 14

The SWOT Analysis is simply a set of lists—the organization’s (or perhaps a product’s) biggest strengths, weaknesses, opportunities, and threats—SWOT.

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Strengths:• We’re us

• We’re great

• We know stuff

• We’re fast

• We’re easy to use!

Weaknesses:• We work too much

• We care too much

• We’re perfectionists

Opportunities:• Own the market

• Expand product lines

• Make more stuff

• License stuff

• Co-brand with Disney

• Create an “experience”

Threats:• Others can get fast

• Others can be easy to use

• Someone gets to

Disney before us

• We don’t have a “big

data” strategy!

Saturday, June 14, 14

Most business people are taught to simply fill these in, like a form. They list everything they can think of.

This is lazy.

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Strengths:• We’re us

• We’re great

• We know stuff

• We’re fast

• We’re easy to use!

Weaknesses:• We work too much

• We care too much

• We’re perfectionists

Opportunities:• Own the market

• Expand product lines

• Make more stuff

• License stuff

• Co-brand with Disney

• Create an “experience”

Threats:• Others can get fast

• Others can be easy to use

• Someone gets to

Disney before us

• We don’t have a “big

data” strategy!

Saturday, June 14, 14

How do you really know that fast or perfection or Disney are what customers want? Where is the rigor, the proof, the research? What’s the point of research if people are just going to fill-in the blanks based on best guesses?

This is a phenomenon that plagues most of strategy.

In order to do a real SWOT analysis, you need to do environmental analysis—context!

Page 62: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

ENVIRONMENTALANALYSIS

Social Issues: Customer Needs and Wants

Political Issues: Legal, Regulations...

Tech. Issues: Technology trends, opps...

Economic Issues: Market trends, opps...

Industry-Specific Issues: ???

Saturday, June 14, 14

What are the top concerns in the market environment?Do users want it fast? What drives their decision? Are there issues coming down the line from the courts or regulation? (we’re already good at much of this, too)

Page 63: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

ENVIRONMENTALANALYSIS

• Customers seek clarity

• Customers are afraid of technology

• RIM is out, HTML5 is in

• Lending is slowing

• Customers worried about their future

• etc.

Saturday, June 14, 14

Only when you’ve explored these can you prioritize what matters (as opposed to what’s possible).

Page 64: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

COMPETITIVEANALYSIS

• Clarity

• Fear of technology

• HTML5

• Loan Help

• Reassuring

X

X

X

X

√√√X

X

X

X

X

√X

X

X

√X

X

√√X

X

X

Saturday, June 14, 14

Once you know these, you can compare yourself against your competitors on the issues that matter! (these are known as decision-drivers)

Otherwise, you’ll be comparing your organization on issues that don’t drive decisions.

Page 65: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Strengths Weaknesses

• Clarity • Fear of technology• HTML5• Loan Help• Reassuring

Saturday, June 14, 14

NOW, you know which issues to measure your strengths and weaknesses are.

Page 66: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Strengths Weaknesses

Opportunities

(Biggest Strengths vs. Biggest Weaknesses)

Threats

(Biggest Weaknesses vs. Biggest Strengths)

• Clarity • Fear of technology• HTML5• Loan Help• Reassuring

Saturday, June 14, 14

And, your Opportunities and Threats work themselves out.

SWOT should be derived from research, not guessed-at, yet this isn’t how it’s mostly done.

Page 67: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Better

WorseSmaller Bigger

Saturday, June 14, 14

And, beware the tyranny of the 2x2 grid. There are always more than two important variables, but it’s difficult for people to hold in their head. Yet, you see it constantly. In the tech industry, this is almost always reduced to price vs performance.

Page 68: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Better

WorseSmaller Bigger

Hey! A Blue Ocean

Strategy!

Saturday, June 14, 14

Otherwise, the hole in the market may not actually be an opportunity.

Page 69: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

For <target customers> that <need/

care about> , our <product, service>,

company> is a solution that <benefit> .

Unlike, <our competitor> , our <product,

service>, company> is <unique

differentiator> .

POSITIONING STATEMENT

Saturday, June 14, 14

This is the same problem with Positioning Statements.

For example, this is how strategy is usually done by our business peers. I kid you not, this is how business schools teach people to create a positioning statement.

Page 70: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

POSITIONING STATEMENT

For our users that need the most

features , our app is a solution that is

fast and inexpensive.

Unlike our competitors , our app is in

the cloud.

Saturday, June 14, 14

We usually get something like this. These are almost always simply filled-in with what people “know” and not derived from what they learn from customers.

Ideally, these items are derived from research about whom? (the customer) In what way, qualitative or quantitative? (both) And who does this better than everyone else? (us/designers)

Page 71: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

POSITIONING STATEMENT

For Professor Plum that needs to

kill someone , our noose

is a solution that is silent .

Unlike, Miss Scarlett , our noose

is purple.

Saturday, June 14, 14

It’s like a MadLibs for business.

This isn’t a bad tool, it’s just misused most of the time.

Page 72: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

} 44The Business Model Canvas

Cost Structure

Key Partners

Key Resources

Channels

Key Activities

Value Proposition

Customer Relationships

CustomerSegments

Revenue Streams

Saturday, June 14, 14

Customer research is at the core of business models, not just corporate strategy. Without it, the plan is set-up for failure.

Page 73: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

} 44The Business Model Canvas

Cost Structure

Key Partners

Key Resources

Channels

Key Activities

Value Proposition

Customer Relationships

CustomerSegments

Revenue Streams

Saturday, June 14, 14

This brings us to the last point I want to make.

Business is about value (what value you can provide, what value people need, and what value you can get in return).

Page 74: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Saturday, June 14, 14

When we abdicate our involvement in higher-level decision-making, we lose our ability to work on the right things—or be successful, or be happy making what we make.

In addition, I can assure you that most of the information used in this strategy phase is based on crappy, quantitative data and doesn’t represent either usability or experience or customers’ real needs. Nor does it represent the most value on the table.

Page 75: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Saturday, June 14, 14

All of us have an opportunity to play a role not only in product development, but also in the board room, where strategy for the company is set (and needs to reflect better customer understanding) because we know customers in better, deeper, and more valuable ways and this information is missing in nearly all strategy development.

Page 76: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Saturday, June 14, 14

We need to get into the room.We need to find ways to get our knowledge into the strategy process to affect what the business thinks it should make and not merely how.

Are you still with me?

Here are some ways to do that...

Page 77: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

MYTHS OF BUSINESSCooperation is for wusses

Growth is everythingThe Free Market (exists)

Markets optimize efficientlyBusinesses are more efficient than Government

“The business of business is business”Rich people create jobs

“Corporations are people, my friend”The Founding Fathers were pro-business

Leadership is based on authoritySaturday, June 14, 14

MBAs have essentially ruined the world. OUR world. Partly, this is because they’re taught a LOT of myths about business, and this is a big problem for those of us who make things for people, whether products or services.

I want to stress that MBAs aren’t bad people, they’re just taught that way.

We have to be able to counter these myths. That means we need to learn a few new things and speak a slightly different language.

Page 78: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

EXPERIENCE TOOLS

designmba.org/open-source-curriculaSaturday, June 14, 14

Page 79: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Qualitative Research Techniques:

InterviewsCareful Surveys

ShadowingLadderingGames, etc.

Book: The Meaning of Thingsby Mihaly Csikszentmihalyi

Saturday, June 14, 14

You know how to understand customer, already! Design research techniques (the qualitative ones, not just the quantitative ones) ARE the pieces missing when strategy is built.

The results from UX research techniques, including some that aren’t as common (like laddering) need to inform strategy—and we need to be the people who bring this up and into the boardroom.

In essence, you can use most all of the research techniques you already do, but you need to augment them to look for core meanings, as well as their prioritization and expression. This leads you to the triggers. One of the only investigations into this is from a book published in 1981! This is pretty much the only thing published on the research techniques aside from a bit in Making Meaning.

Page 80: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Flavor

Bright/ Saturated

Hard, Artificial, Natural

Curvaceous/Smooth, Solid,

Sharp/Pointed

Loud, Simple/Clear,

Musical/Melodious, Mechanical

Musky, Bright, Alcohol,

Forest/Plants

Meaty, Salty

Accomplishment Triggers

SoundColor Materials Form Aroma

Saturday, June 14, 14

I hate “mood boards!” Essentially, they’re unprofessional. Unless you can explain why each element applies to your solution, they’re a distraction—or worse, delegitimizes your value.

If you are researching the triggers around sensorial decisions, only these are applicable responses to understand. This isn’t about “inspiration” but around the responses your customers have to potential decisions you’ll need to make. And, this, is what is valuable and actionable.

Page 81: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Flavor

Primary Hard Complex Loud Forest/Plants Sweet - Sugar

Community Triggers

SoundColor Materials Form Aroma

Saturday, June 14, 14

Page 82: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Flavor

Muted/Desaturated Plastic

Porous Natural/Organic Natural,

Floral Salty

Harmony Triggers

SoundColor Materials Form Aroma

Saturday, June 14, 14

Page 83: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

6. TRIGGERS//

Core meaning pair 1: Community/Accomplishment Colors: Bold / Gold Silver Bronze Materials: Natural / Textured Forms: Circular / Tall Sounds: Chatter / ROCK! Aromas: Wood fire, Chocolate, Earth Flavors: MultiSpice

Saturday, June 14, 14

Page 84: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

6. TRIGGERS//

Core meaning pair 2: Beauty/Oneness Colors: Bright, Colorful, Materials: Rich Forms: Organic, Simple Sounds: Nature, Crickets, Singing Aromas: Dewy Forest, Sweet, Salty Ocean Flavors: Mint, Sweet

Saturday, June 14, 14

Page 85: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Core Meaning Triggers

Through on-line surveys and in-person qualitative interviews, we identified a series of triggers that evoke the core meanings:

Community Beauty Freedom Harmony Truth

Colors Bright, Green

Soft Pastel

Bright White and Light

Warm Muted

White, Dark, Shimmery Light

Material Natural, texture, woven, Smooth, Pliable

Shiny, Natural

Natural, rough, hard, smooth, flowing river

Smooth, Earthy, Natural, Soft

Tough, Hard, Natural

Form Round, Organic

Curvaceous, Fluid, Organic, Complex

Open, Complex, Organic, Not bound

Round, Organic

Solid, Sharp

Sound Laughter, not Loud- like an orchestra or lots of voices, multi-pitched

Soft, Musical, Complex

Musical, Waterfall

Rhythmic, Natural, Balanced

Soft, Resonant, Silence, Complex

Aromas Fruity, Earthy, Food

Floral, Soft, Perfumed

Clean, Fresh, Ocean, In the woods

Nature, Musty, Fresh

Clean, Fresh, Antique smell

Flavors Nutty Sweet, Dinner

Sweet, Fruity

Fruity, Nutty, Meat

Sweet, Warm, Complex, Mix

Salty Sour, Minty

Saturday, June 14, 14

Page 86: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

INITIATION (EXPECTATIONS)STATE OF MIND (CONTEXT):

BACKSTAGE:

TOUCHPOINT ECOSYSTEM: PRODUCT, SERVICE, EVENT, NAME, IDENTITY/SYMBOLMEDIA: SOCIAL, ETC?

LOCATION

EMOTIONS

TRIGGERS: VISUAL (COLOR, TYPE, LAYOUT, IMAGE, PATTERN), AUDIO, AROMA, TASTE, TOUCH, CONCEPT

MEMORY, BIAS, MENTAL MODELS

GOAL/VALUE

AGENT

ACTION/RESPONSE:

ENGAGEMENT CONCLUDE/REFLECT CONTINUATION (REPEAT)TIME > > >

ROX

WAVELINE TEMPLATEPROJECT:TASK:

INTE

NSI

TY >

> >

PLANNED

ACTUAL

PERSONA/ACTOR:

designmba.org/open-source-curriculaSaturday, June 14, 14

We need to think of this journey in emotional, identity, and meaning value, and not merely in terms of functional and economic value. A waveline is a technique that comes form the narrative worlds (music composition and screenwriting). Think of it as a journey map with all forms of value listed.The trick is that you first map these forms of value BEFORE you plot your touchpoints on it. Products, services, etc. are the mechanism of creating the relationship (and value) and not the things that generate the best value.

Page 87: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

CCA LEADING BY DESIGNFELLOWS PROGRAM

www.cca.edu/fellowsprogram

EXPERIENCE WORKBOOK

OBSERVATIONS ANDOPPORTUNITIES IN

EXPERIENCE DESIGN

15

THE 6 DIMENSIONS OF EXPERIENCE:There are 6 dimensions of every experience, whether these are natural orman-made adn whether these are business-oriented to not. This workbookwill help you explore and analyze the experiences around you and aideyou in developing better experiences for customers.

SIGNIFICANCEMeaningStatus/IdentityEmotions/LifestylePrice/ValueFunction

DURATION (TIME)Initiation

ImmersionConclusion

Continuation

TRIGGERSSightSoundSmellTasteTouchConceptsSymbols

BREADTHProdcutService

BrandName

Channel/EnvironmentPromotion

Price

INTENSITYReflexHabitEngagement

INTERACTIONStatic

PassiveActive

Interactive

For each of the dimensions above, observe your customers/users/audiencewhen and where they experience needs and current solutions.

EXPERIENCE OBSERVATION

INTENSITYIs the experience...

REFLEX? HABIT? ENGAGEMENT?If so, there is likely no designopportunity.

If so, can this experience beturned into an engagementexperience?

This is where the vast numberof opportunities lie.

DURATION (TIME)Is the experience...

REFLEX? HABIT? ENGAGEMENT?If so, there is likely no designopportunity.

If so, can this experience beturned into an engagementexperience?

This is where the vast numberof opportunities lie.

1 14

BUSINESS MODEL:With these new elements of experience, are their threats to your gurrentbusiness model?

Are there new opportunities?

designmba.org/open-source-curriculaSaturday, June 14, 14

Page 88: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

EXPERIENCE

DURATIONInitiationImmersionConclusionContinuation

TRIGGERSSightSoundSmellTasteTouchConcepts/NamesSymbolsPrice

VALUEMeaningful

Status/IdentityEmotional/Lifestyle

EconomicFunctional

INTENSITYReflexHabit

Engagement

INTERACTIONPassiveActiveInteractive

BREADTH(CHANNEL/TOUCHPOINTS)

ProductService

EventEnvironment (Space)

Saturday, June 14, 14

These are the major dimensions of design. All but one, “triggers” are invisible. And, that’s the only one we traditionally think of as “design.”

All of these are always available to you when creating experiences (products, services, events, envirnments, etc.), whether you use them of not.

Page 89: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

EXPERIENCETRIGGERSSightSoundSmellTasteTouchConcepts/NamesSymbolsPrice

INTENSITYReflexHabit

Engagement

INTERACTIONPassiveActiveInteractive

DURATIONInitiationImmersionConclusionContinuation

VALUEMeaningful

Status/IdentityEmotional/Lifestyle

EconomicFunctional

BREADTH(CHANNEL/TOUCHPOINTS)

ProductService

EventEnvironment (Space)

Saturday, June 14, 14

But I will talk about this one because it’s the other important one.

Significance defines the depth of the relationship.

Page 90: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

CORE MEANINGSVALUES/IDENTITYEMOTIONSPRICEFEATURES (PERF.)

Saturday, June 14, 14

Which means it defines the levels of value that emerge in the relationship.

Page 91: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

CORE MEANINGSVALUES/IDENTITYEMOTIONSPRICEFEATURES (PERF.)

VALUE:

Saturday, June 14, 14

AND, it aligns with what we know about the five kinds of “total value.”

Without realizing it, people ask themselves a series of questions with they evaluate choices: Does this do what I need? Does it have the right features? Does it perform well? These are easy questions that we’re very aware of and they’re shallow ones.

Page 92: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

CORE MEANINGSVALUES/IDENTITYEMOTIONSPRICEFEATURES (PERF.)

Does this do what I need...?

VALUE:

Saturday, June 14, 14

Without realizing it, people ask themselves a series of questions with they evaluate choices: Does this do what I need? Does it have the right features? Does it perform well? These are easy questions that we’re very aware of and they’re shallow ones.

Page 93: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

CORE MEANINGSVALUES/IDENTITYEMOTIONSPRICEFEATURES (PERF.)

...at a price that’s worth it?

VALUE:

Saturday, June 14, 14

But, as we move deeper, our questions change: What price am I willing to pay for these functions?

Features and Price are actually low-value, short-lasting connections with people (and highly competitive). And, most businesses focus almost entirely on price and performance. A focus on meaning becomes a better corporate and national strategy for innovation.

Page 94: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

CORE MEANINGSVALUES/IDENTITYEMOTIONSPRICEFEATURES (PERF.)

How does this make me feel?

VALUE:

Saturday, June 14, 14

Even deeper, our questions become more intimate and abstract: Does this make me feel good? Or bad? or younger? Or more successful? But, as powerful and influential as emotions are, they last only a short duration.

Page 95: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

CORE MEANINGSVALUES/IDENTITYEMOTIONSPRICEFEATURES (PERF.)

Is this me?

VALUE:

Saturday, June 14, 14

Deeper still, things get even more personal until the questions focus on our identities, whether we realize it or not. Are you a Coke person or Pepsi person? Mac or Windows? native or urbanite? Techno or classical?

Page 96: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

CORE MEANINGSVALUES/IDENTITYEMOTIONSPRICEFEATURES (PERF.)

Does this fit into my world?

VALUE:

Saturday, June 14, 14

Then we reach the deepest point of connection between people (or between products, brands, organizations, movements, and people). You get to these through qualitative research techniques and they drive the deepest relationships.

Meaning is a complex phenomenon but the model is clear, which is the appropriate design approach and desired outcome for life. We don’t actually want a simple life because lack of choices that make our lives personal isn’t fulfilling. We want options and, with that, comes complexity. Design’s response is to help business, government, and society clarify these options so they are easier to understand and choose and, therefore, allow us to build meaningful lives that are clear, but not simple.

Page 97: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

AccomplishmentBeautyCreationCommunityDutyEnlightenmentFreedom

HarmonyJusticeOnenessRedemptionSecurityTruthValidationWonder

15 CORE MEANINGS:

Definitions: makingmeaning.orgSaturday, June 14, 14

If you want to design for meaningful experiences (the highest-value relationships), we use a pallet of priorities about the world and how we understand and engage it.

Meaning is something we all create, react to, and understand (though we don’t always acknowledge it). These 15 core meanings are universal.

We have the models, which means we can do it deliberately, instead of intuitively or accidentally.

Page 98: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

CorporateMeaning Priorities

Team Meaning Priorities

CustomerMeaningPriorities

Competitors’ Meaning Priorities

Strategic Focus

Saturday, June 14, 14

Focus on what relationships and experience strategy does.Align the organization (it’s goals, vision, and operations) with what customers want, need, and value the most and what the org can deliver well.

Page 99: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

CorporateDecision Drivers

Team Decision Drivers

CustomerDecision Drivers

Competitors’ Decision Drivers

Strategic Focus

CommunityWonderSecurity

AccomplishmentSecurityWonder

SecurityCommunity

Accomplishment

Saturday, June 14, 14

These describe the real drivers of decisions and value for customers and this allows us to align our strategy around these very, most valuable opportunities. This comes from experiential (qualitative) research. It can drive the rest of the quantitative decisions, strategically, to better our chances of delivering the most and highest-value value.

In other words, focusing on price and performance, as most of us were taught (and are likely, currently measured on), isn’t bad business, but it’s not where the most value is.

Page 100: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Instagram

$1.05B

~$50M

Saturday, June 14, 14

This value!

If we can do this, we can help our peers create the very kind of strategy that creates the best kind of value (and makes us important).

Page 101: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

Saturday, June 14, 14

Are you willing to focus on relationships, brave the business-speak, an use your design powers to create meaningful things?

WE need to do this, because there currently aren’t anyone else who can.

Page 102: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

THANK [email protected]

designmba.org

M A K E I T S O Interaction Design Lessons from Science Fiction

b y N AT H A N S H E DR OF F & C H R I S TOP H E R NOE S S E L

foreword by Bruce Sterling

Many designers enjoy the interfaces seen in science fiction films

and television shows. Freed from the rigorous constraints of designing

for real users, sci-fi production designers develop blue-sky interfaces

that are inspiring, humorous, and even instructive. By carefully studying

these “outsider” user interfaces, designers can derive lessons that make

their real-world designs more cutting edge and successful.

“Designers who love science fiction will go bananas over Shedroff and Noessel’s delightful and informative book on how interaction design in sci-fi movies informs interaction design in the real world. . . . You will find it as useful as any design textbook, but a whole lot more fun.”

ALAN COOPER“Father of Visual Basic” and author of The Inmates Are Running the Asylum

“Part futurist treatise, part design manual, and part cultural analysis, Make It So is a fascinatinginvestigation of an often-overlooked topic: how sci-fi influences the development of tomorrow’s machine interfaces.”

ANNALEE NEWITZEditor, io9 blog

“Shedroff and Noessel have created one of the most thorough and insightful studies ever made of this domain.”

MARK COLERANVisual designer of interfaces for movies (credits include The Bourne Identity, The Island, and Lara Croft: Tomb Raider)

“Every geek’s wet dream: a science fiction and interface design book rolled into one.”

MARIA GIUDICECEO and Founder, Hot Studio

www.rosenfeldmedia.com

MORE ON MAKE IT SOwww.rosenfeldmedia.com/books/science-fiction-interface/

MAK

E IT SO

by NATH

AN SH

EDR

OFF &

CHR

ISTOPH

ER N

OESSEL

Experience Design 1.1a manifesto for the design of experiences

by Nathan Shedroff

product taxonomies 16

user behavior 116

100 years 22

information 42

takeaways 28

data 36

knowledge 48

subjectivity 78

consistency 96

navigation 84 Design Strategy in ActionEdited by Nathan Shedroff

A publication from the MBA in Design Strategy programCalifornia College of the Arts

2011

Saturday, June 14, 14

Page 103: What is Means to be Strategic and Create Value (UX Strat Summit, SF 2014)

[email protected]

designmba.org

Saturday, June 14, 14