How Design Thinking and Direct Observation of the Customer Experience Guides Companies to Better Meet Customer Needs

This week’s guest is Karen Hold, founder and CEO of Experience Labs. Karen is an expert practitioner and consultant in the field of design thinking. With her team at Experience Labs, Karen helps clients innovate and adapt to change in industries ranging from education, professional services, government, health care, financial services, telecommunications, entertainment, and the arts.

She is also co-author of “Experiencing Design: The Innovator’s Journey,” which serves as a guide for innovators to achieve transformational change through design by shifting their mindset and skillset.

In this episode, we discuss the principles of this book in the context of how to optimize the customer experience throughout the customer journey. Not only does Karen explain what design thinking is and why it’s valuable to CX, but she also shares examples of design thinking in action. These examples illustrate how observing customer experiences helps companies create experiences that delight customers and increase sales.

A Career Path Is Not Always a Straight Line

A native of Washington, DC, Karen started her career in politics. After reading Tom Peters’ “In Search of Excellence,” she decided to change directions and go into business. She built a foundation in business strategy and brand management at a major consumer packaged goods company.

With a strong foundation in place, Karen and her husband started a business of their own in the telecommunications sector. And when the dot-com bubble burst 13 years later, she embraced the opportunity to shift directions again.

Drawing on her years of experience, Karen founded Experience Labs 12 years ago to help companies transform their solution-development mindsets and behaviors, putting design thinking at the heart of their efforts. Today, individuals and teams—with design thinking experience ranging from newbies to experts—hire Experience Labs to facilitate designs and develop training programs, crash courses, and design competitions.

Why Should Solution Providers Use Design Thinking?

Companies use journey maps, focus groups, and other business intelligence tools to gain an understanding of their customers. But limiting customer research to those tools often leaves big questions, including:

  • Does the solution solve a significant problem for the customer?
  • How will the customer react to the solution?
  • Will the customer want to use the solution more than once?

Those unanswered questions leave companies with substantial risk. In a worst-case scenario, what seems like a great idea today could be at risk of failure tomorrow. Design thinking limits that risk and increases the likelihood of a positive customer experience.

What is Design Thinking?

The best way to understand design thinking is to explore the three elements of its framework:

  1. Customer Obsession

Design thinking practitioners must be obsessed with the customer. To generate better solutions, they need to have an absolute grounding in the user experience, their problems, and their needs. That’s why direct observation of customers trying to solve their own problems is key to design thinking. From a customer perspective, design thinking is what makes products or services easier, more intuitive, and more enjoyable to use. It boosts customer satisfaction and customer retention.

  1. Experimentation

Practitioners experiment with solutions not only to delight customers but also to lower their company’s risks and costs. Sometimes those experiments produce not-so-obvious results that change how companies design and/or market their solution. From a business perspective, design thinking is a risk management strategy that uses experimentation to help practitioners make smarter, more informed decisions and reduce risk.

  1. Diversity of Input

The best solutions come to light when there is diverse input. But companies don’t always know how to work across differences within their organization. This is especially true in large organizations where the differences in how everyone works are more pronounced. Design thinking provides the social technology to create solutions together and work across differences within organizations. From a practitioner’s perspective, design thinking is a way to solve problems creatively with people who think and work differently.

How these elements work together becomes clearer when we look at them in practice.

Three Examples of Design Thinking

Karen has seen design thinking at work since her early days with a major consumer goods company. The three examples she shared with us present three companies, three customer problems, and three completely different solutions—all resolved with design thinking.

  1. Finding the Right Job for the Perfect Scent

A company spent close to a billion dollars on what is, essentially, a room deodorizer. But when they tried to sell it, nobody wanted to buy it. The people who had smelly rooms didn’t notice the odor or care about neutralizing the odor. (Think of homes you’ve walked into with pet odor or tobacco smell.) The company discovered that people who live in those homes never notice that smell.

The company learned through observational research—going into homes and following consumers—that people with odorless homes would value the product as a room perfume. These insights identified a new target customer and transformed their product development.

With that knowledge, the company completely changed the product, including the marketing. It went from zero to a billion dollars in revenue and became a brand leader in its category with high levels of customer loyalty.

  1. Taking the Scary Out of a Big Scary Machine

An industrial designer wanted to create a piece of hospital equipment that would be top-of-the-line and state-of-the-art, and he did. The hospital equipment he designed won a lot of design awards for the technology used to create it.

When he went to a hospital to see it in use, however, he saw a six-year-old girl standing frozen at the door. She could see this piece of equipment, the one to be used for her test, and she was in tears. She was too scared to enter the room. And the worst was yet to come. The test required sedation for most children because the equipment was noisy and produced low-quality imagery if the patient moved.

The industrial designer resolved to turn this scary situation into a friendly experience for this six-year-old girl, and for all children, so they would be able to take the test without fear.

After consulting with early educators, children’s museum directors, preschool teachers, and children themselves to develop potential solutions, the designer and his team created a kit that included:

  • Stickers that kids enjoyed putting on the equipment.
  • Scripts for the administering techs to use with the kids.
  • Playlists for music to play during the test.

The total cost of the kit was $50,000, a fraction of the cost of the equipment.

The design thinking team turned a negative experience into one that children enjoyed. Some asked if they could come back the next week. And because children enjoyed the experience and were able to stay still, sedation rates went down. That meant anesthesiologists could work on more pressing cases.

The wins for the hospital, the wins for patients, and the wins for families were significant. All were accomplished through the use of this $50,000 sticker kit that resulted from the design thinking process.

  1. Making Floor Cleaning Less of a Mess

A consumer packaged goods company wanted to make it easier for consumers to clean their homes. They spent time in peoples’ homes to solicit true customer feedback and to better understand how they cleaned their homes.

They discovered that people were spending as much time cleaning their mops as they were on their floors. As Karen put it, “If you were a Martian,” and you landed here in the United States, and you watched what people did when they cleaned their floors, you might think they were cleaning their mops rather than their floors. The whole process was messy, so much so that people were putting on their “dirty clothes” to do the job.

With the customer insights gained by going into homes, watching how people cleaned their floors, and applying the design thinking process, the company was able to create a product that was much simpler to clean the floor with, didn’t cause as much mess, and didn’t require as much time or effort to clean the mop itself.

Origins of Design Thinking: Transforming Mindsets and Behaviors

While many people have never heard of design thinking, the concept originated more than 50 years ago with psychological studies on creativity.

Academics coined the term when studying two kinds of leaders:

  1. Those who were able to make substantial gains within their companies.
  1. Those who could not make those gains, even though they had the same contacts, same industry, and same size organization.

They found that some leaders were growth leaders focused on innovation and other leaders maintained or worked at the status quo.

They then identified the mindsets and behaviors that growth leaders used to achieve success and codified them for the rest of us into a framework that became known as design thinking. Now, design thinking practitioners learn from those mindsets and behaviors and adopt them into their own practices to develop innovative solutions and achieve profound results.

What Karen Does for Fun

Karen is a skier and hiker who likes to spend her time in what she calls her “happy place,” the Sawtooth Mountains of South-Central Idaho.

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