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Why Cisco flipped over the Flip Video Cam (and paid $590 million for a small dose of simplicity)


What is simplicity worth; to Cisco Systems apparently quite a lot.  One can visualize the PowerPoint deck from Cisco’s investment banking group showing how acquisition of Pure Digital Media (maker of the Flip Video Camera) would: A) be a potentially decent financial investment and B) would imbue Cisco, a company whose products are arguably among the worst in terms of usability on the planet, with a much needed dose of positive brand equity. Recently, Cisco has apparently gotten religion around the idea of usability and user experience design, first by hiring a team of “user experience architects” and now through the acquisition of a product whose main feature list consists of basically one word, “Simplicity”. This comes as no surprise to anyone who tracks technology adoption trends. It has been known for some time that IT products overall are being driven toward less complex set up, use, and maintenance interaction sequences. This trend is known to impact products in all segments ranging from consumer applications to serious commercial IT offerings.

What stimulates creation of simple user experiences is not what it used to be

Let’s be clear, this push toward operational simplicity is not motivated by IT’s desire to do the right thing but is a result of a more recent economic imperative that says simply that customers want products and services that can be acquired, set up, used, and maintained by the lowest level of technical expertise possible while sustaining suitable reliability. For example if 2 manufacturers make the same category of routers and one can be serviced by technical school grads and a 3 page user manual and the other by employees with an MS in computer science and a massive call center in India, guess whose stock price is eventually dropping like a stone?

How “expertise consumption” is becoming the core of expense management

Expertise, in all its various forms, is the new currency of corporate profitability. In a world where IT is the CENTERPIECE of business processes “expertise = expense” and nothing eats up expertise like IT hardware and software.  So, for all the years that usability and user experience design has been proffered as a soft benefit that demonstrated customer awareness, it is now clear that usability and user experience design are actually key factors in expense management. With the new focus being on management by metrics, the actual cost of expertise is now finally being measured objectively. For example: one router (Company A) costs $2,000 but consumes $10,000 in set up and maintenance costs. A second router (Company B) sells for $3,000 and costs $300 dollars to set up and maintain. It only takes one quarterly board presentation on IT expertise costs to understand that Company A is no longer the router of choice. So, whereas usability was previously thought to be no more than a “nice” attribute, not having serious usability performance is now a “nasty” liability.

The interesting question is how do corporations which have previously been disdainful of formal usability science and user experience design actually make the transition to a development culture that values above all the cost (cognitively and technically) demanded of customers using its products? Give this question to an investment banking group and the answer will be to acquire simplicity in the form of a company that has such a development culture. The idea here is that simplicity and the ability to create products which actually are less complex to learn and use can be bought and/or transferred between corporate cultures. Sorry, it does not really work that way because developing a culture that creates simplicity as a primary corporate strategy is not the same as creating one or two simple products. One is massively complex; the other is trivially simple.

Why simplicity is fundamentally an innovation diffusion problem

The key to moving from a development culture that is technology-centered to one that is actually user-centered depends on the corporation’s willingness to support innovation as a core concept. Based on research conducted in the writing of a chapter for the book titled: “Cost-Justifying Usability: An Update for the Internet Age”, we described the factors that must be present for formal user-centered design to be successfully adopted into an existing corporate structure. Below are the key list of attributes from that chapter. Note: this list is adopted from the excellent work of Everett Rogers, Diffusion of Innovations, which deals with innovation dispersion within corporate cultures. We view the dispersion of usability science and user-centered design as fundamentally an innovation dispersion problem and not a factor that can be acquired through M&A.

Factors that impact dispersion of innovations and the creation of simplicity

  1. Centralization of decision-making is negatively correlated with adoption of innovations such as usability science. If all decisions are made in a centralized manner, usability science is less likely to be effectively adopted within the organization.
  2. Complexity of the organization’s staff background and educations can be positively correlated with adoption of innovations. If an organization has many highly qualified and professional individuals from varied disciplines, it is more likely to adopt innovations such as usability science. It is especially important that no one discipline dominate product development decision-making.
  3. Formalization of rules and procedures is negatively correlated with adoption of innovations. The more structured the organization’s development rules and procedures are, the less likely the corporation will be to adopt an innovation.
  4. Interconnectedness is highly correlated with adoption of innovations such as usability science. This means that the level of network utilization and interpersonal communications that take place between and across divisions and departments and even within individual teams of corporate employees and executives are strong predictors of willingness to adopt innovation.
  5. Organizational slack is simply the amount of uncommitted resources available to use in the adoption of new and powerful ideas. It is important to remember that all corporations run on a yearly development budget and rarely is there a line item for “open innovation” resources, those resources which can be deployed easily and quickly to problems that often drive simplicity into product design solutions.

If one were to apply the attributes listed above to Cisco Systems (and many other leading IT companies) it is likely you will find that while these large IT entities may have the desire to sell products that demonstrate simplicity and are paying a lot in an attempt to do so, they have some serious obstacles to overcome before they will be able to successfully create truly simple and empowering user experiences on a corporate wide basis.

Why creating simplicity is more than flipping a switch

It is important to note that creation of a consumer product like the Flip Video Camera is relatively easy compared to reducing the complexity of a major piece of IT infrastructure. The difference between these 2 types of problems can be found in the depth of the user experience layer that must be modeled when creating a product or system that is truly easy to learn and use. The Flip Video Camera can be optimized in many ways by trial and error modeling of the user experience. However, creating higher levels of simplicity in truly complex, software-based interfaces requires the application of formal and highly structured cognitive modeling of the relationship between the user/customer and the deep feature sets of more complex products. This is exactly the point at which buying simplicity and creating it comes off the rails for companies like Cisco and others companies who produce products with deep feature sets.

The ability to successfully employ new design processes that may result in the development of products with simplicity attributes like that of the Flip Video Camera requires essentially altering the structure of the product design process itself. Traditional processes focus almost exclusively on the design teams’ vision of what the product should be with little acknowledgement of the underlying cognitive processes of the end user and how such processes affect acceptance of a product in the marketplace. In fact, one of the most difficult problems facing design teams is realistically accepting the fact that they cannot represent the cognitive state of the end user as they develop new products and services.

Why the simplicity game has changed

A development process that successfully creates simplicity in the face of increasing complexity shifts the perspective of the design process to the actual customer through the application of usability science. This shift allows the design team to develop a product that matches how the user thinks about and interacts with the product resulting in designs that are more engaging, innovative, and less complex to learn. But this is not exactly a ground breaking insight since the concept of “user-centered” development has been around for decades. So what is the important story here, what has changed?

If you are not measuring simplicity, you are not creating it

The difference today is that to apply professional usability science properly to increasingly complex products requires the establishment of formal user-based “simplicity metrics” which a new product must objectively meet in order to deliver a truly engaging user experience. It is this shift toward basing design decisions on hard user experience performance metrics that is a sea change for companies like Cisco and many others struggling with the “Expertise-Consumption” problem. Any company today (large or small) that wishes to develop game-changing simplicity in a market category and does not have a set of tightly structured simplicity metrics is simply kidding itself…simplicity is not going to happen. If you are not basing your design on initial cognitive modeling of the user experience supported by repeated user testing it is highly unlikely that simplicity will be a claim you can make in the marketplace.

Why development executives feel uncomfortable with simplicity as an objective

To clarify our point, what we are talking about is NOT the same as a corporation running a usability study when the product or system is in late Beta. Such an approach will never deliver insights that result in major reduction in learning and operational complexity. It is simply too late. If true simplicity is a goal it is necessary to test design concepts repeatedly against “simplicity metrics” during development. This means building much more robust simulations and constant user testing with unbiased respondent pools. As any experienced development manager can see immediately, the requirement of constant user testing of simulated user experiences virtually reverses their existing development model…not a comfortable position given the nature of the economic environment we face today. Some, like Cisco, may feel that it is easier to purchase simplicity than attempt to create it on a corporate wide level.

Why cognitive capital is the new measure of business success

In our experience, without rigorously (and repeatedly) evaluating the cognitive workload placed on the end user during product development it is nearly impossible to create solutions that result in empowering and game changing user experiences. The simple truth is that it’s not easy for most design teams to accept that the user’s perspective on what is actually simple and empowering is vastly more valuable than their own. Unfortunately for companies like Cisco and others, this shift in perspective can’t be guaranteed by acquiring a company whose culture may have created a terrific product like the Flip Video Camera and hoping that simplicity will occur by “osmosis” or for that matter even by plan. In the near future business success will turn on the cost of “cognitive capital” not “financial capital” and nothing consumes cognitive capital like IT product complexity. Just ask anyone who has tried to install a Cisco router recently.

Charles L. Mauro

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