Tag Archives: business process

Ethnography and its uses in business

As we are becoming more of a mass customization and transformation-based economy, more and more business are looking to use ethnography in designing better customer experiences. In this article, Procter and Gamble, Google, and others are doing it.

For Google, it involves observing and videotaping how people search online.  A success story was when they observed how difficult it was to search for keywords for Chinese consumers.  A tool called “Google Suggest” was created, when a user types a few characters, the search engine suggests alternate or possible completed key terms.

For Procter & Gamble, Managers and even Senior Managers engage in “immersion research,” in order to spend time with consumers in their natural habitat – their home.  They try to understand what their customers’ aspirations, desires and needs are, as well as what the role of their products are in the consumers’ daily lives.  An example was when P&G launched a laundry detergent and it failed because of a lack of empathy for its Mexican consumers.  Using ethnography, a key insight was derived when they discovered the importance of seeing the laundry detergent’s foam to Mexican consumers, which their product lacked.

The case for developing empathy for customers is clear.  What are some methods of developing empathy for them?  According to this article, using ethnography to better understand the consumer is key.

In conducting an ethnography, watch their behavior around their natural habitat. What artifacts do they use?  How do they go about their daily chores? Why would the customers engage with a particular experience? How they go about engaging in this?

Pay close attention to the language they use.  People speak in metaphors.  Metaphors reveal much about the person’s attitudes and mood.  For example, some customers may view retirement as the beginning of a journey, and viewing everyday is living life to the fullest versus viewing retirement as the ending of a journey.  When conducting ethnography, try to videotape, voice record or even take photos.

When conducting these studies, there will be multiple personas that can be classified demographically and psychographically.  These can be utilized by two purposes.  One is to present these to the client or marketing department, so that the client and the marketing department understand who their target consumers are.  The other is to humanize the customers.  Give these personas names, behaviors and motivations, demographic information, identification of what keeps the consumer up at night, and statement about the person’s personality in their voice (e.g. “I’m a detail-oriented person, who appreciates and loves intricate designs”)

Currently, I’m involved in an ethnographic study.  Because of the economic downturn, many people are being laid-off.  My study is about what motivates and inspires people that are unemployed or under-employed while job searching.

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Why do companies rest on their laurels and not embrace change?

It is well-known that in order for companies to innovate and build sustainable businesses, they must adapt both their business model and products/services to match the marketplace and the consumer’s needs and wants.  But many businesses seem resistant to change, even ones that are/were dominant.  If this problem is widely-known, why does this exist?

Knowledge at Wharton examines a book by Black and Gregersen that examines this.  The article cites numerous examples that involve both companies and individuals.

In the case of mobile phones, Motorola was highly successful with analog phones.  Even though digital phone technology existed, it did not feel the need to invest in the future technology because their core competency was in analog technology, and digital technology was an expensive proposition for both the mobile phone producer and the carriers.  Nokia took an opportunity with digital technology, and became the largest mobile phone company in the world.   Samsung was for a while perceived to be a discount mobile phone producer.  It has made inroads in Asia where mobile phone penetration is amongst the highest in the world.  It also recognized the need for a camera in the handset, this was not to replace the digital camera, but rather used as a convenience instead.  Just as Motorola ignored Nokia, it paid dearly with respect to both earnings and market share.  By ignoring the emergence of Samsung as a competitor, Nokia also suffered from the same mistake as Motorola.  Will Motorola, Nokia and Samsung all suffer the same fate with the emergence of Apple and its iPhone? Only time will tell.

The historical example from the article mentioned a Spanish explorer named Cortes was commissioned to find the island of California.  Upon exploring the Gulf of Baja, he was convinced that California was an island.  Another explorer was sent to corroborate the findings of Cortes, and he too was convinced that California was an island.  Because the King of Spain believed this, and that there was difficulty to dispel this notion, it took more than 200 years to correct.

So, why did Motorola, Nokia, and Cortes rest on their laurels and did not effectively adapt to the changing ideas?  This was because both the companies and individuals did not fully understand the strength of new ideas and they did not take the time to fully understand them, and it has led to the downfall of these aforementioned companies and individuals.  More importantly, many companies or individuals are blinded by this missed opportunity because of their current successes in their present model or way of thinking.  Both people and companies develop mental maps on how certain procedures or ideas operate.  The longer these maps have been successful, the harder it is for people or companies to feel a need to switch.  These mental maps also guide both peoples’ and companies’ paradigms.  This trap can happen to any company and to anyone.

I also think that there are other reasons in addition to the ones stated in the article, in my opinion, these include: 1) The hardship and the difficulty that the businesses or individuals perceive as well as experience in order to fulfill the change;  2) Businesses or individuals believe that focusing on its core competency(ies) will minimize its potential failures;  3) From a cost perspective, being already invested in its core competency can reap both economies of scale and scope, and these would not be realized with focusing or investing in new technologies; 4) new and emerging technologies or ideas are unknown, and therefore risky.

The Usage of Web 2.0 in business

 

 

 

To what degree have businesses embraced web 2.0 technologies? How have they used this to interact with their employees, suppliers and customers? There was a survey conducted by McKinsey that addresses these two questions.

 

 

Web 2.0 is defined as the ability for users to interact, share, collaborate, and exchange ideas.  The age of user-generated content and ideas aid in the development of Web 2.0; applications of such usage include: Wikis, Blogs, RSS Feeds, Social Networking sites, etc. 

 

 

Findings include that most companies employ web 2.0 technologies to for internal usage, interfacing with customers, and interfacing with suppliers.  Some benefits that can be derived by engaging those three parties include: fostering collaboration within the company and as well as encouraging customer and supplier input in the product/service development process; tapping into a larger pool of experts; improving customer service and managing knowledge internally.

 

 

Since this survey was conducted internationally, different markets ended up having different needs and consequently, having different levels of satisfaction.  For example, in the Asia-Pacific area, the satisfaction of web 2.0 technologies is the highest, and the use of wikis is the highest.

Not surprisingly, the company’s satisfaction of web 2.0 tools is highly correlated with the usage and implementation rates. 

 

 

Some of the barriers for satisfaction for the usage of this tool include: senior management not embracing this technology; senior management not understanding the potential financial return; not having sufficient resources to adopt or experiment with web 2.0 tools; and the IT department not deploying or instituting such technologies.

 

 

The business that reported the highest satisfaction with the usage of web 2.0 tools adopted this technology by business units rather than IT department, whereas, dissatisfied respondents exhibited the reverse, where IT departments chose the tools and delivered to the business units.  Almost 60% of respondents were satisfied with the web 2.0 initiatives, expect these business to be more aggressive in the marketplace with those who are slower to adopt this technology, also, it is inevitable that more investment is being poured into the adoption of this technology. 

 

 

 

 

Companies that understand the intrinsic benefit of adopting this technology need to have all levels of management embrace this, and the adoption needs to be business-unit driven.

Design in Business Process

 

This article is an interesting read about design.  Earlier posts have reiterated the importance of user friendly designs.  In the past, new technology without much thought to design was practiced.  Today, especially, with the younger generation, design is the most important criterion.  For example, the portable mp3 player market is dominated by Apple with their iPod.  Compared to its competitors, the iPod is easy to use, as there is only one button versus a multiplicity of them with other competitors.  Also, the graphic user interface is also friendly.

 

 

Businesses must become agile to adapt to this new age where barriers of entry are now low, which is facilitated by user-generated content. Transforming a business into becoming agile to embrace change can only be possible if innovation, risk taking, and radical ideas are embedded into the organizational culture. This is facilitated if throughout the organization, staff need to act, feel, and work like designers.

 

 

The article is summed up with this quote:   Design is the accelerator for the company car, the power train for sustainable profits. Design drives innovation, innovation powers brand, brand builds loyalty, and loyalty sustains profits. If you want long-term profits, don’t start with technology—start with design.