Giraffe Forum

Cloud computing and virtualization reflect a general movement driven by the Web: a shift towards a more service-driven economy.

There are two major trends that are now coming together to reshape our economies and societies. One is the continuing replacement of humans by computers in the workplace. Computers are essential in manufacturing and in the office. They continuously replace human effort and boost productivity.

Consider this: most of the products we design today could not be designed without computers. A new computer from Dell, for example, can only be designed by using computers from a previous generation. In other words, an older model of a computer is helping in the creation of a newer one.

So in which areas are computers not likely to replace humans (at least in the short term)? Service. The caring industries. People like being cared for by other people. A genuine smile and a friendly voice have a powerful affect on us. The computers will look after the hard space, humans will look after the soft space.

The Web thrives on interconnections; cloud computing and virtualization live on the Web. If you are not connected—if you live on a remote island with no outside connections—then to live you must physically have everything you need beside you. But if you live on the Web, it doesn’t matter where what you need resides, once you can make use of it. It’s not the owning or the physical proximity that matters—it’s the use. And what are the implications of all this? Service.

Steve Ballmer, CEO of Microsoft, said in March 2010 that Microsoft was “betting our company” on the cloud. I hear the same sort of statements in other big companies I deal with. There’s a shift to the cloud; a shift to service.

Part of this shift is of course technical. But there’s an equally large cultural part . A service-driven economy will be different from a product-driven economy. Why? Because the most important thing will be the service. You pay 10 dollars a month, not 400 dollars as a once-off payment. That changes how you think about what you’re getting.

Most organizations are structured around a launch and leave project-based culture of products, marketing and communication campaigns. The reward is for producing things (products, websites, brochures, videos, advertising campaigns). In a service-driven economy, the reward-structure will be based on how happy the customer is with your service.

How does a service-based brand thrive? By showing customers that you care about meeting their needs, month-in, month-out. These customers have not bought your product; they’ve bought your service. And that means they judge you on your service and can leave you more easily if your service declines. In service-driven economies people are locked in by trust and satisfaction, not by the fact that they have made a major investment in a product and must stick with it.

Are you ready for service? Because that’s where the Web is at. Great websites are run by service professionals. People who want to help their customers succeed. People who care more about whether the customers are happy than whether the organization is. If you focus too much on the organization—the internal politics—you invariably lose focus on the customer.

Customers are much more likely to get impatient with your website than they are to be bored with it.

When was the last time you were bored with a website? Do you get bored with Google? Do you get bored with Amazon? Perhaps the last book you bought from Amazon was boring, but was the Amazon website itself boring to use?

Do you get bored with Facebook or Twitter? You might get bored with your friends but it’s unlikely that you’ve been bored by the websites themselves. When Facebook announced that they were redesigning their website did everyone go: “Great! We’re so bored with the old one!”

Quite the opposite actually. “After a redesign in March, a Facebook poll revealed that 94 percent of users didn’t like the changes,” Caitlin McDevitt wrote for Slate in February 2010. “When Facebook introduced its News Feed in 2006, students organized to protest against it.”

The Facebook changes may have been the right thing to do. In the long-term, people may have found them very useful. However, people liked the old design because they were used to it. They didn’t want change. Often, the organization wants change much more than the customer.

Why do organizations want change? A number of reasons. To make more money. To improve the quality of the service or product. Because a new manager has been appointed and they need to make their mark. Because the marketing department is bored with the old design. Just bored. It’s a few years old and they’re sick of looking at it.

Redesigning is fun. You feel important. Agencies are great at making you feel that way. They show you way cool designs and you can bring all your intellectual and artistic skills to bear as you discuss way deep things like emotional appeal and branding. Be careful.

The best word to describe your customers on your website is “impatient.” The vast majority of them are at your website to get something done as quickly as possible. The only people who are likely to complain about your website design are website designers. Craigslist is constantly being told that its site is boring. “But the people I hear it from,” Craigslist CEO Jim Buckmaster told Wired in 2009, “are invariably working for firms that want the job of redoing the site.”

This is a really difficult message for marketers and communicators to hear, but we need to hear it and really, really listen. Those of us who think the essence of our jobs is to make our websites exciting don’t have much of a future in the web industry.

I have said it so many times: Offline marketing and communication is about getting attention. Web marketing and communication is about PAYING attention. The difference in the getting attention skill set and the paying attention skill set is the difference between night and day.

You pay attention to why customers have come to your website. You judge success based on whether they have succeeded in quickly completing the tasks they came to complete.

Focus on reducing your customers’ impatience. And remember, you get paid to be bored.

Managers in large organizations are too concerned with downsizing and cost cutting and not concerned enough with efficiency, productivity and customer satisfaction.

“Much of the conventional wisdom about downsizing—like the fact that it automatically drives a company’s stock price higher, or increases profitability—turns out to be wrong, Jeffrey Pfeffer writes for Newsweek in February 2010. Pfeffer writes that there is “empirical evidence showing that labor-market flexibility isn’t necessarily so good for countries, either. A recent study of 20 Organization for Economic Cooperation and Development economies over a 20-year period by two Dutch economists found that labor-productivity growth was higher in economies having more highly regulated industrial-relations systems—meaning they had more formal prohibitions against the letting go of workers.”

“Buy new technology so that you can let people go” is a golden rule of modern management. There is a belief that the very purchase of technology will in and of itself make the organization more efficient. People are the problem. Technology is the solution.

At some point, letting go of people becomes a counter-productive strategy. At some point, managers need to focus on the people that are left within the organization. A manager needs to ask: How can I make my staff more productive and efficient, not with a view to letting some go, but rather with the objective of making the organization more competitive?

Organizations bemoan the loss of customer loyalty to brands. Loyalty is a two-way street. From an organizational point of view, loyalty begins after the customer has bought the product or service. Loyalty is built or lost when the customer has a problem and needs help from the organization. The downsizing devotees invariably try to spend as little as possible in customer support. Long term, they reap the consequences.

The end objective of technology should be to extend the capabilities of people, not to replace them. Sure, as technology drives efficiency some people will lose out, but that should not be an objective in and of itself. The objective should be to become more efficient and deliver a better service to the customer.

Properly managed, an intranet can deliver greater efficiency and reduce costs. It can help staff carry out tasks faster. It has that potential, but it is a potential that is not being realized in most intranets because of a lack of focus on the tasks and the staff who need to carry out the tasks.

Technology must ultimately be for people, not a replacement for people. I have met many managers over the years who have little or no concern whether the time of their customers or staff is being wasted by websites with confusing menus and links and poor search results. However, if I tell these very same managers that I’ve found a way to reduce headcount, they get very excited.

The goal of the organization should not be to fire as many people as possible. The goal should be to become as efficient as possible. To achieve efficiency we need quality people working with the technology to test, tweak, mould, refine, adapt, plan.

People are not always the problem. And technology on its own is rarely the solution.

Lay Off the Layoffs
http://www.newsweek.com/id/233131

Good complexity leads to greater convenience, choice and options. Bad complexity leads to frustration, wasted time and wasted money.

Dimitris is a small business owner in Greece. According to a TIME article, he estimates he has paid “about a fifth of his revenue in bribes — to tax collectors, health inspectors, police and other officials”. Small firms “are essentially obligated to conduct business this way,” he says. “There are so many legal barriers to conducting business that they’ll shut you down otherwise.”

The Mystery of Capital by Hernando De Soto is one of the most impressive books I have ever read. In it, De Soto comes up with a variety of reasons as to why some countries succeed while others fail. A core reason is corrupt, complex bureaucracy. The government acts as a parasite. It forces you to go through a whole host of unnecessary and complex steps if you want do anything.

If you want to buy land, set up a company, renew your driver’s license, whatever, you will be forced to go through step after complex step. This is bad complexity and it exists so that you will require ‘advice’ from the corrupt official. Of course, a nice bribe will allow the official to ignore all these unnecessary steps, but then you’re in their trap because they can force you to follow the letter of the law if they want to.

Many organizations have enemies within. Departments and divisions care only for themselves. They will introduce complexity that makes the organization as a whole more dependent on them. In fact, the way modern organizations are structured rewards bad complexity.

Examples of bad complexity can be seen everywhere. Marketers and communicators don’t care if they make a website more difficult to navigate once they can push their message. Programmers will add more features to a product, not because these features are needed, but because new features show that the programmers have been doing something. Legal people don’t want you to understand legal documents because that would diminish their importance.

Bad complexity creates dependence. Good complexity creates independence. One of the things the Web reflects is a movement away from the production of products to the delivery of services. In a world of production the thing itself often dominates, but in a world of service the satisfaction of the customer dominates. In other words, in a service- driven world, the measure of success is not what you have produced, but rather how satisfied your customer is.

A service culture hates bad complexity. But we have a long way to go. I recently spoke to a manager of a website and told them there was a problem with one of their customer’s top tasks. “That’s not my problem,” he replied. “That’s an application. The IT department look after that.”

Web teams need to take responsibility for the customer’s experience on their website. But that’s a major challenge because the organization is often working against the web team. Websites are often difficult to search and confusing to navigate—bad complexity—because the organizational units care more about themselves than their customers.

At the root of the problem is the fact that senior management encourages and rewards this bad complexity behaviour by setting organization department/unit-based objectives, rather than customer satisfaction and task completion-based objectives.

It is time for marketers and communicators to stop treating customers like little children and start treating them like intelligent adults.

“In order to continue to improve our products and deliver more sophisticated features and performance, we are harnessing some of the latest improvements in web browser technology,” the good Google person told me. “This includes faster JavaScript processing and new standards like HTML5. As a result, over the course of 2010, we will be phasing out support for Microsoft Internet Explorer 6.0 as well as other older browsers that are not supported by their own manufacturers.”

Why couldn’t they have just written:
“Over the course of 2010, we will be phasing out support for Microsoft Internet Explorer 6.0 and other older browsers.”

“Thank you for your inquiry,” the fye.com auto-generated email that was impossible to reply to stated. “To assist in providing you the quickest answer to your inquiry, please see the Help Section of fye.com.” Hello? Sorry, fye.com, but that’s not the quickest way by any means. It is, however, the cheapest way for you to deal with support. Why be so dishonest with your language?

I had to call my broadband company today. “Your call is important to us,” the voice said as I waited on hold. Is it indeed? If my call was important to you then you’d answer it. You wouldn’t put me on hold and you wouldn’t insult my intelligence by saying “Your call is important to us.”

Do organizations actually test their lies, deception, spin, and half-truths on customers? Does it really work? Or does it instead annoy and irritate customers?

I was staying at the Royal Lancaster in London and I wanted to sign up for broadband. I clicked on the link. “Welcome to the The Royal Lancaster,” Thank you for choosing us to serve as your “home away from home”” And it went on and on and on. “Whether for work or pleasure, we are pleased to introduce our industry leading in-room high-speed Internet services amenity … It’s Easy to Use … We hope you find this service exciting and valuable.” When I clicked “Continue” I was then told the price. £17 for one day. Yes, £17.

“We are delighted to inform you that the Guest Elevators are currently undergoing a complete refurbishment,” the sign outside the Hilton Edinburgh elevator told me. And me, I was absolutely delighted too, thrilled, and jumping for joy as I carried my heavy bags up the stairs.

I remember reading about a study of house selling in the book Freakonomics. Seemingly, in for-sale ads the following words were associated with houses of genuine quality: “granite, state-of-the-art, corian, maple, gourmet.” Poor quality houses, on the other hand, had these words associated with them: “fantastic, spacious, !, charming, great neighborhood.”

I saw an example of this one day when I visited a house for sale that was advertised as: “Fantastic and rare opportunity to acquire this beautiful 7 bedroom detached home. This property has got it all!” As the sales agent quietly said to me, “The only thing you could do with this house is knock it down and start again.”

Here’s a radical idea: Tell the customer the truth. They can handle it.