Ask just about any technical or line of business leader about their top five business priorities, and there’s a good chance that customer experience and innovation make the list.
In fact, nearly 90% of companies surveyed by Gartner report that they now expect to compete in their industry primarily based on customer experience. That number has more than doubled in just four years.
Jake Sorofman at Gartner explains, “As competition and buyer empowerment compounds, customer experience itself is proving to be the only truly durable competitive advantage.”
Customer experience as a competitive advantage isn’t new. Apple retail was a poster child of differentiation through innovative customer experience, launching stores where at least half the space and staff were focused on training, support, and service. More recently, Warby Parker introduced their form of innovative customer service to eyewear retail. Their stores feature greeters who help customers as soon as they enter the store, a mirrored layout so customers interested in the same frames don’t jostle one another, engaging associates who carry tablets for ringing up customers, and low-key pricing. Warby Parker went from startup to a $1.2 billion valuation in six years.
So while customer experience as a core competitive advantage isn’t new, customer experience as the only durable competitive advantage for most industries is definitely new, and organizations are in the early stages of grappling with that reality.
The challenge is that competing on customer experience requires an entirely different way of working. It takes right-brain thinking.
The Left Brain vs. Right Brain Challenge
Most established organizations, especially those with decades of history, are really good at structure and process. Whatever they do—manufacturing, client services, logistics—they do it efficiently, consistently, and at scale. All of this takes a certain kind of organizational muscle and mindset.
Let’s call this an organization’s left-brain thinking.
Neuroscience has, of course, messed up this tidy metaphor by teaching us more about the beautiful complexity of our brains, but let’s ignore that for now and run with it.
For the vast majority of established organizations, left-brain ways of working are habits with decades of practice and positive reinforcement. The habits needed to create great customer experiences—creativity, disruption, and innovation—are messy nonlinear right-brain processes.
The left-brain mindset—focused on efficiency and process—rejects right-brain work like organizational antibodies swarming a foreign object. The left-brainers roll their eyes, thinking that the right-brained “arts and crafts” crew can stop messing around anytime now so they can get back to doing real work.
What Happens to Innovation in a Left-Brain Organization
The typical strategy over the last 10 years has been to keep creative and innovative work separate from the rest of the organization. Some companies create an “innovation lab” in cool urban digs where teams experiment and innovate without interference. Others fund and acquire startups to do creative work by proxy.
While this approach looks like success in the short term—allowing creative processes and new ideas to flourish—failure is inevitable. Yes, quarantining creative teams frees them from the influence of process-oriented left-brainers, but that also means the core organization is free from influencing its investment in right-brain thinking. To make a new idea exist in the world requires navigating the entire interior of an organization. It can’t be done at arm’s length.
Practical Steps for Placing Design Thinking Practices at the Center of Your Business
There is a better way, where design thinking and innovation are given space to allow right-brain thinking to flourish but are kept close enough to navigate and influence the entire organization. For those who aren’t familiar with the term, design thinking is a process for creative problem solving that uses empathy and experimentation to arrive at innovative solutions. Decisions are made based on what future customers really want instead of relying only on historical data or on instinct instead of evidence.
Highland works with dozens of organizations at various stages in the process of bringing innovation and design thinking back into the core of their organizations. We’ve learned that there are three key steps required for anything resembling success.
First, it’s important to assemble a core team of business-minded people who are capable of working in creative ways. We all know that designers and developers should be part of this kind of endeavor. But what is often overlooked is the need for business leaders who can lead right-brain innovation work and navigate the established organization. These leaders are critical to success.
Second, you should start small, by identifying “early adopters” in your organization who need help understanding their customers, delivering better experiences, or launching new products or services. Don’t fall into the “innovation theater” trap where big press releases about “doing innovation” are followed by conspicuous silence. Instead, start small and grow the work and awareness by building credibility internally.
Third, make sure to sort out an approved infrastructure that lets you experiment and deploy digital products and experiences rapidly. This inevitably means tangling with governance, security, and compliance, which can be painful up front. But having the ability to create, prototype, test, iterate, and deploy into market is necessary to move through the whole design-thinking and innovation process.
Low-Code as Infrastructure for Innovation
As organizations begin to center design thinking in their business practices, they will need tools to help them put their insights into action at a rapid pace. I think OutSystems, a high-performance low-code platform, has tremendous untapped potential here. Most organizations I know that are using OutSystems are working on modernizing and standardizing sprawling application environments or working more rapidly through an enterprise backlog to digitize processes. And that makes sense. These are left-brain objectives supporting left-brain organizations.
But OutSystems presents unique advantages as an infrastructure for innovation. Thrivent Financial has been using the platform to apply design thinking to the process of bringing several new products to market. They’ve made OutSystems a core platform for testing, iterating, and deploying digital products and experience that are the result of right-brain work. As a result, Thrivent has been able to experiment and build new products faster. Not only that, but they are doing it with smaller teams, and they have reduced their technical debt.
Putting Design Thinking to Work
Here’s my challenge to you: If you’re in an organization that is already using design thinking practices, ask yourself if they are a part of your core business or if they’ve been quarantined in an “arm's length” innovation lab.
If design thinking and innovation are being kept at arm’s length from the heart of your organization, chances are that work you’re doing there is not going to help you compete on customer experience long-term.
Like many major companies have learned in years past, siloed innovation hubs will fail to make a meaningful impact. But organizations that build innovation and design thinking into their standard operating procedures will better serve their clients and remain more competitive.
Are you a leader working to bring design thinking into an established organization? Or do you want to get on that path but haven’t started yet? I’d love to hear more about what you’re doing.