Impactful UX: Business Essentials for Researchers and Designers

In a time of business uncertainty and changing customer priorities, it's more important than ever for researchers and designers to have a "seat at the table."

Getting there requires an understanding of business goals—and how to use your insights to help impact them.

Join leaders in research, design and UX as they help you ensure your insights and work get the buy-in at your org that they deserve.

Carolyn, McLean and Ben will share advice and strategies for:

• Building business acumen for UX practitioners
• Articulating the value of design in “business” terms
• Developing strategic plans that include customer and business outcomes
• Teaching researchers, designers, and others to use business metrics in their everyday work

Transcript:

Transcript:
Carolyn:
... People nerds. I can start by saying I am a business anthropologist by training. I did that both in undergrad and in grad school. And now I work as a user researcher and innovation consultant. And previously to starting Arlo Labs, I was at a small consultancy based in Copenhagen where I worked primarily in the consumer goods, consumer electronics, automotive and telco space. Then about two years ago I decided to go out on my own and start my own business, Arlo Labs, and I specialize now in the healthcare world primarily with med tech in the early tech startup space in New York City. Most recently, my projects have been focused on developing new digital health solutions, or platforms, for patients and providers. So really focusing on how to improve the patient experience and provider experience.

Carolyn:
I must mention, I'm a social scientist by training. So I went to a liberal art school. I never once took a business class, an economics class or a stats class. And so that's kind of my background, very, very social sciency. Very much an anthropologist. And this is kind of the reason why I've been wanting to do this webinar and teach some of these mini MBA essentials, which is even for someone that doesn't come with this type of rigorous training and MBA program or on through business platform. And it's still something that you can learn and build into your arsenal to help you be a better collaborator and consultant or advisor to your clients or to our stakeholders. And my goal here is to help demystify the world of business. And a lot of these tools that we'll go through today are things you can learn on your own, read on your own, and start building into your day to day work tomorrow. And without needing to go through expensive MBA.

Carolyn:
To be fair, I want you to go through an MBA program but just did not go through that process. And then for the last five years, I've been teaching a sort of mini MBA tailored for UX practitioners and social science practitioners to help them up level and improve their business acumen.

Carolyn:
Some of the things we'll go through today are some of the pillars of what I teach in my course. I'm actually teaching to starting next week. And one for UX, LX, which is a European UX conference, which is now of course, remote. And then when later down this year with the enterprise experience, which is hosted by Rosenfeld Media. And all again, all of this came out from my own lack of understanding and lack of awareness of the business world when I started going into consultancy and starting to work with big clients and sell the stuff that I wish I knew I had, I hope that we can share it with some of our participants today.

McLean:
Yeah. Thanks Ben. Hello everyone, McLean here. Most recently, I was the vice president of user experience design for Shutterstock in New York city. For many of us know it as the stock photography platform. It's actually a pretty scale two sided market place. Every second about 10 creative assets are downloaded, publicly traded. Two thirds of our revenue came from outside North America. I oversight 25 person design organization, everything from research UX to UI.

McLean:
Before that I was at Expedia in Seattle. I'm sure we're all familiar with the brand. A very scaled eCommerce platform. I think my last year there, we did 1700 AB tests. Just to give you a sense, we had 150 UX designers on staff. So kind of inmates running the asylum. And I think kind of pertinent to today's conversation. Earlier in my career, as I progressed, I found myself in border meetings, in investor meetings and words like EBITDA, profit and loss statement would pop on the screen and I'd say, well, here's my envisioned prototype.

McLean:
And really found that the language of business is finance and I didn't speak it. So during the day I was a UX designer and at night I took the bus downtown and got my masters of business administration. So imagine me in a Hawaiian shirt with kind of a bunch of folks in suits. But that was able to really kind of take what I learned at nights in finance and strategy, and really weave it into my human centered design practice. So I'm really excited just to share a couple of lessons. I learned some of the hard way with the all because I completely agree with Carolyn. You don't need the MBA to learn these things. These are teachable skills and learning these skills will really make your work more impactful and valuable.

Carolyn:
Yeah. So I'm so glad I'm doing this webinar with McLean, because I think we come from similar world, but different perspectives. I'm very much in the research world. He's very much in the design world, and we're both in consultancy now, but he worked in enterprise and I've worked mostly my whole life in consultancy. And so I think it's really cool we can bring these different perspectives together and still say, how do businesses central's help us as UX practitioners.

McLean:
For sure, Batman and Robin model. You'd be Batman, I'll do Robin, whatever. We're good.

Ben:
And I love it because for me, we've been doing some work at people nerds with folks like Steve, who was heckling me earlier. And I love that Steve, by the way. We are asking folks, what's on your mind? Research leaders in particular, design leaders, research leaders, insight leaders. And they were talking a lot about how they are hearing from their frontline, both designers and more so their UX, CX people. McLean to your point, they're tired of doing AB tests or concept prototype tests that they want to get into strategy. So often they would say like, "Ah, my practitioners and my UX stars, they keep telling me about how they want to be at the strategy side of things." And I think that what we'll be discussing today is a path toward that.

Ben:
You need to be able to advocate for the user. And I think what McClean and Carolyn will be talking about is also advocating for your work. And if you can tie it to some outcomes, you will get a seat. As we're going to talk now at the table to start asking some of those strategy level questions. Where should our business go when everyone is remote and our digital engagement is up this, but our brick and mortar engagement is down this, for example. If you're someone who believes that research or a design research process could help answer that question, you'll need to advocate for that. So Carolyn, why don't you talk a little bit about why you believe it's important to get a seat at the table for folks who are user centered.

Carolyn:
I mean, this language here at the table has been around for years. I think across all the practitioners today, that's when really new heal has happened. It's advanced researchers, designers. We are at the exact table. I actually want to start by talking about one of my own experiences when I was very early in my career at my last consultancy.

Carolyn:
I was sitting at a round table with my client. Not an exec table, but just a normal table where we were doing a round of introductions to kick start a project. And everyone here at the table was in marketing or strategy. And the project specifically was around how to position a new product onto the market and specifically a children's toys. And then it finally got to me, I said, "Hi, I'm Carolyn, I'm an applied anthropologist. And I'm so glad to be here."

Carolyn:
And I remember the woman next to me, who is the PM. She looks at me. She says, I'm sorry, but how can an anthropologist help us here? And I remember I was like, "Oh man, this is actually a time where I'm sitting at a table getting questioned why I'm here." Again, being a young female, a person that comes from a social science background, sitting with all these strategy people. I felt very insecure, very uncomfortable, and this was a sticking moment in my career up. I don't want this to happen again, where I feel people see my background as working against me and not credible and helping them achieve their business goals. Even though again, I come from a different area of expertise. So that was kind of a sticking point where they thought this is where I need to start up-leveling myself, starting teaching myself the business tools and to have a conversation at the table and not be questioned.

Carolyn:
And so, again, as I mentioned, I think seeing more of advancement of UX people were part of strategic decision making. We're not really at the end, just validating product decisions, or validating research insights or making things look pretty really. They're kind of at the forefront of where should this business go. I think one key thing that we're going to see moving down the line is that UX strategy will essentially became business strategy. They will not be two separate entities working parallel, but separate. I think the two will be formed together and even more so we'll be working with the business people and informing that. And then one thing I want to say is, as we are getting a seat at the table and we're working much closer with the decision makers and the execs. As McLean said, we really need to start learning the language of our peers and to communicate with them in their language.

Carolyn:
And so much of our time as social scientists or researchers designers has been focused on representing the voice of the user and making sure that we are representing their needs and their challenges designing for them. And that at the end of the day we also need to recognize that we are here to represent our businesses, our companies, our clients, and that we need to build and design in line with what their end goals are.

Carolyn:
So how do we speak the language of business and how do we actually start to build empathy, not just for the users where our expertise is, but really for our clients and stakeholders. Understanding where their journey is, their motivations, their goals and that's questions we need to be asking ourselves. What matters to them? What are their KPIs? What is the language they're using when they're talking to their peers?

Carolyn:
Things like CLTV, MRR, CA. All these things I never heard and understand before that it's being thrown around the table. How do we actually understand that? Why that's important for them and help our clients or stakeholders meet their goals as well. And then one thing I always say, when I'm working with them, my teams, it's how we focus on understanding our users' needs and challenges before we start designing solutions for them. It's exact same type of mental model that we need to apply for our businesses. So what are our business challenges? What are their needs? What are their motivations? We have to have a really solid understanding of that before we can help ideate for them as well.

Ben:
And McLain, these beautiful numbers. Those are yours. Could you say a little bit why you wanted those to be here as we introduce the topic of the sort of rationale? Why should we care?

McLean:
Yeah. I think there's a real tailwind that's getting us that seat at the table. It can feel like a high chair, but it's a seat. But today alone, just under a million websites are going to go live. We've seen open source technology, make bringing products and services to market easier and easier. So that means differentiation and experience really matters. And that's compounded by the margin of error is so slim when dealing with customers.

McLean:
One bad, he called the phone, it doesn't work. It's not mobile optimized, you're toast. That's all it takes to kind of lose a customer in today's economy. And then also I think from designers were thrusted up into that seat, but then we're asked to be horizontal too.

McLean:
We have to work with human resources, marketing. We really are stretched across almost like human resources are. And so really stretched vertically. And then there's huge expectations for us. There was a great study that found like Airbnb, Warby Parker, all these kinds of design centric companies outperformed the S&P index, which is the aggregate of the top 500 public companies by 228%. So this isn't just the design evangelism. These are real dollars in today's economy.

Ben:
That's awesome. And folks who are asking questions, thank you, keep those coming. We have a lot of questions about ROI and metrics and Carolyn and McLean have some really great models and frameworks. That again I forgot to mention this at the top, but you will receive this recording as well as the slides so that everything that they'll be talking about you will get copies of. All right. So let's get into that. One of the frameworks we have, Carolyn, this is the sort of core tenants that you believe undergird some of the business basics. Could you walk us through this?

Carolyn:
Sure. So exactly what we said what do we mean when we talk about business essentials and where do we even start with someone who, again, comes from a UX perspective? It's kind of my three area where I start my workshops or seminars on. If we can have a basic understanding, do some reading on these three areas, and you will be much better equipped and positioned to be interlocutors with our colleagues. And that's financial principles, organizational structure, and corporate strategy. I think these are all words that we hear and we know, but to really deep dive and understand kind of what each of these are. So I'll go through each of them really quickly. And then we can kind of discuss. The first one around financial principles as McLean really put it well earlier. He said what is the language of business? It's finance, it's money it's dollars.

Carolyn:
This is how all the execs communicate their results to the world and how they evaluate whether success is happening or success is not happening. So this is something that's really key. Also probably really scary for a lot of UX practitioners, where again, I never took a finance course. I never took a stats course, economics course. I never understood what P&L meant. I never went in annual in a report prior to starting to try to up-level my business thinking.

Carolyn:
But I think one of the key things for me is we think about financial principles. The number one thing where I think everyone should be starting. If you're a company is public where your clients are public is to be reading the annual report and specifically the profit and loss statement. I know this sounds very kind of banal and obvious, but I think from my own experience in this role, that you'd be quite surprised how few people actually take the time or build that into the workflow or work process.

Carolyn:
You get a super solid understanding of where they are today as a company. And again, why finance is the language of business. At the end of the day, every business school that is really to drive the top line, which is increase your revenue or to drive the bottom line, which is to cut costs, increase your net income. That's in the most simplistic way of understanding businesses. But that is again, how do we keep a more commercial mindset as UX practitioners, which is our job is to help support the company by the top line or bottom line, through better products, through better services, through better user experiences. And so that's kind of where I'm always starting to teach the course, which is re-dissecting the profit and loss and really understanding how is the company performing. Even if their revenue looks like it's growing, if you're dissecting and seeing well, their net income is decreasing, or their rate of growth has changed. There are reasons to rationale score why that's happening.

Carolyn:
And that's our goal to kind of dissect why that's going on and how we can better frame our own research projects and to help kind of dissect and drive changes to drive the top line or bottom line.

Carolyn:
So again, understanding where the company is spending money, where the money is going and whether the goal is to cut costs, to drive the top line. And those are things that you need to have a better understanding on to be more effective in your own role. And also to speak that language.

Carolyn:
So if you work with an exec, understand that their biggest fresher is cutting SGNA, which is the general kind of operating costs and your goal and mandate is to launch new products in the market, which is very much going to cost them a lot more money. How can you guys work together to see there are two different conflicting needs and goals and where can we call us to come together? So that's the first one, very basic. It was just understanding financial principles and understand the profit and loss statements specifically. And I think if you can show your stakeholders that you understand the pressures that are under, and you can use that language, I think there'll be much more open to also coming up with new product recommendations, innovations, et cetera.

McLean:
And Carolyn, sorry to hop in. Just a quick way to kind of bring this to your desk tomorrow at work. Any company you work for, whether it's a nonprofit, a startup or a scale company they have these people whose whole job it is to prepare the P&L statements and income statements. They're called accountants. There are people too but I know a secret about accountants. They love burritos. Yup. That's true. I'm inflicted buy I'm kind of serious actually. I think you'd be really amazed if you take the time, work cross functionally buy your accountant a burrito and have them walk through those documents either for your company or public company and just get a cup of coffee with them every quarter. You're going to go zero to 60 real quick and just kind of understand that dialogue and we'll fill in some gaps there. But I mean, go buy your accountant a burrito. You'll pick up some duolingo just in the day.

Carolyn:
And I can say, and this is something I hear all the time with my clients, which is my job is often to ideate new products and services on the market. Which is new capabilities, new things that we need to invest in. And that drives their top line. But so often I think a lot of the execs start focused on cutting costs and trying to reduce the SGNA. So I'm always at odds with them of why is your recommendation strong enough for me to take a bet on that versus reducing the salesforce? Things like that. So we can just showing empathy again for where they are, where they feel pressures from their own business and having a strong rationale for your case.

Ben:
McLean if I may interject for a second. We have a lot of questions about something that you and McLean are talking about. So we've got folks who are asking a lot about ROI and ways that they can tie their work to success metrics. And I know we have some models for doing that later.

Ben:
I'm wondering if you could talk about when each of you works with customers who, again, or clients where you're asked that question, like, but how will my investment in you return... What sort of ROI will I get? Are there outcome metrics or variables that you tie them to ones that have worked in the past? Again, the questions are blowing up with these sort of like, yeah, but how do I break through. So McLean's topic or point about like, we'll meet with the people who are the knowledge source for what P&L looks like or how we did last quarter to this quarter. Do you have any wins that you can describe when you use that language, again, specifically around finance or an outcome that you tied your research to?

McLean:
I can pop in just real quick from kind of a project that we worked on Shutterstock. I got to Shutterstock and you've got a lot of different business verticals, footage, images, music, different ones. And essentially each of them were on different technology stacks with different UI structured behind it. And we knew just as designers intuitively that a new design system would give a new look and feel and resonate with users.

McLean:
But that within itself doesn't convince a CFO to fund a major initiative like that. And so what we did to Carolyn's point earlier was what we calculated was, well, we've got 200 engineers. And 25% of their time are being spent on just maintenance of this brutal archaic system. What's an engineer salary? 150 grand slice that out. We were able to quantify how much time we're spending just on maintenance of the system alone.

McLean:
And then we're able to calculate that versus the cost of the initiative. And so taking 25% of a very precious resource, and now investing that into revenue generating experiences rather than just cost and maintenance paid for the initiative itself many times over. So for designers, yeah, I know sometimes business folks think revenue generating but a lot of our initiatives really work towards cost savings. And so that's a great way to find some quick wins, put some numbers against it. and as Carolyn said at the end of the day, cost savings goes into operating income. It's not like it goes to the happy hour budget. So that's a quick way to kind of find some financial metrics to articulate the value of the work that you're proposing.

Carolyn:
I could talk about one of my recent projects with a med tech company, and it's in the area of chronic pain. And this company creates a device that helps people better manage and cope with it. But really there is a product that you test and for a couple of weeks to see if it works for you, and then you decide whether you want to move forward and actually get it. So there's this kind of user journey.

Carolyn:
And my proposal to them was to do a foundational ethnographic research study, where we followed the patients from the day of their trial, all the way to when they're back home, from the doctor's offices. This is a huge project to go and meet people pre coronavirus in their homes and understand that process. And I think the way I sold it was there's two things that are going to come out. That's going to help you with understanding your business and business interest.

Carolyn:
One is understanding where the patients are falling off, where you're losing people and understanding what are the kinds of drivers for why that's going on. And that's something that we can quantify with a potential small sample size, but saying here, 50% of people are falling off at this particular point. Because for example, the sales reps are not communicating in a way that they understand. And by having that quantified number, I'm saying here's an opportunity where we can improve the patient education. We're going to increase conversion and adopt another 25% of people who are going to move forward with actually getting into product. And that's one way. And the second way of saying, how do we actually drive topline and say from where the patient needs and challenges are against their user journey, here's concrete product education, service materials are going to again increase conversion.

Carolyn:
So helping, again, my project beginning with studying a foundational ethno study, but the way I positioned it is this is going to help you understand where you're losing people. The amount of people that you losing, why you're are losing them in the concrete solutions we can to improve conversion and adoption of the product? I think framing and speaking that type of language is going to help execs and your stakeholders better understand why research can actually drive the business.

Ben:
That's awesome. Again, the questions are blowing up folks, keep them coming. That's great. Carolyn, could you talk a bit about how the organizational structure fits into that? I think that's a nice segue into that second tenor that you've got.

Carolyn:
Yeah, definitely. So this is again, one I think we read a lot about, but don't spend too much time thinking about, which is how is a company actually structured?

Carolyn:
And I know we'll be talking a little bit about strategy, but the big thing is structure follows strategy. You organize your people, you organize your teams in a way that helps your business achieve their goals. So there's actually many different ways companies can be organized functional by whether you're marketing or engineering, by product, by your different product lines, by geographic or matrix, which is kind of a hybrid of those. So very first thing to understand is how is my company organized and why have they put people in that sort of hierarchy? And again, this helps you be a better cross-functional collaborator. So you understand the different needs of your marketers or engineers, et cetera. The second thing, which is a little bit more like political and using your anthropologist lens, which is understanding the culture of the company and saying who actually holds the power in the organization.

Carolyn:
And again, from my experience in the med tech world, which is very different than in consumer goods, the engineers are the people who tend to always have the power. They are the ones who are making the final decisions, they are the ones who have the biggest budget, because med tech is very sciency, it's product. It actually is based in science of what's technically capable and unlike in consumer goods where you can put a lot of marketing budget and you're selling an idea or a vision or a lifestyle. So by understanding those kind of dynamics, and I think you're much better equipped to position yourself on your work and understand and help in the company saying who actually has power, who has the decision making factors and how are those decisions actually being made.

Carolyn:
And then we talk about having a seat at the table if we want to influence decision making. One very important thing to do is understand how decisions are made today. So maybe the CEO who like on the outskirts, it looks like they have power. They're actually really being influenced by the marketing or the engineering. And be able to understand that dynamic, I think, especially in the consulting world is extremely important to get your recommendations to stick and get to market.

Carolyn:
Okay. And then I can talk a little bit about corporate strategy, which is kind of the biggest area. And I know strategy is a word that we throw around so so often and something that myself and many companies don't have a super strong understanding of, and we confuse tactics with strategy, tactics with goals. And it's quite, I think, confusing, but this is, I think one of the most important things that we as UX practitioners need to understand the actual strategy of our company, not just of the UX world or what our mandate is to that we're working on for the next six months and next year.

Carolyn:
Really what is their long-term goal five years from now? And what is their short term goal one year from now? And I think for us, if you want to design a solution that is actually going to drive top line or bottom line you first need to understand what is the company's problem and how does a strategy that they build solve on that problem.

Carolyn:
If you can't define the problem, you can't define the solution. And when we talk about corporate strategy, one of the biggest things that I do when I come from the consulting side is understand what are the assumptions that the teams have made about the people, about the market, about their users, about their competitors, and how has that informed their strategy? And if I can dissect that, those are things I can challenge what I'm doing in my field work, where I'm out in the field, understanding the real world life. And hopefully it can help inform a stronger strategy that actually drives their goals.

Carolyn:
Because again, these are the kind of three key areas I would start to dive into courses extremely high level, but hopefully starts as a starting point for where you and your teams can do more reading. And then again, build the language, understand the dynamics of a company, understand what parts of a strategy, which we'll get into a little bit can help you in your work. And then I think, yeah.

Ben:
I'm so Sorry, Carolyn. We had a question that just related really nicely to what you said about not only being concerned with the P&L and the EBITDA, the things that they're working with right now today, but the strategy took into like horizon two and even horizon three.

Ben:
We had a question from, I want to make sure I get this... Let's see, oh, I can't see this person's name, but they ask about expected value. McLean, Carolyn have you ever pitched something to someone on the future ROI of it or this idea of like return on design investment was another comment or question we got. And if we want to hold off on answering that to get to the frameworks, I'm just thinking a bit on strategy. I'm curious about that sort of future oriented pitch of the work.

McLean:
Yeah, I think honestly, to be candid, sometimes from an observer, there feels to be a real gap sometimes between research and business outcomes. And as a result, research can feel like a check the box sort of thing. I'd say one area where I think research can really kind of connect the dots is in understanding market value and market opportunities. A quick example, at Shutterstock, we were in the stock photography space. We traditionally worked with creative agencies, et cetera. We worked on an initiative called Shutterstock Editor, which was a lightweight content creation tool. That was a completely different business segment.

McLean:
And I think a lot of people were like, "Oh, why are we doing this? This feels like a one off thing." But even our researchers were able to calculate, hey, the market for creative professionals is XYZ. The market for small businesses, marketing budgets is 100 acts what we're looking at here. So even if we only get 1% of this market, it's probably 20% of this market. And so I think often for researchers, if you're looking for quick wins ways to kind of quantify your value, just looking at the addressable market size. And even if you can kind of bite off 1% or 2%, it's going to be a heck of a lot of money there.

Ben:
That's awesome. Folks, these questions are great. I know I keep interjecting to say, but let's walk through this, which is the sort of map of, or a potential to map your organization. And Carolyn would you talk through why this might be beneficial.

Ben:
We're getting some questions from folks, like what resources do you have on books to read? So if there are things that helped you when you were taking this... I mean, McLean, if you want to reach over to the book.

McLean:
Yeah

Ben:
A few folks who are asking whether or not getting an MBA is worth it, or maybe talking about some of the outcomes that... Or like how that getting an MBA might shift your path. So we've got some career oriented questions and some resources. Why don't we start here with this map you've got Carolyn, talk us through it.

Carolyn:
Okay, great. So this is what I called the business model canvas. This is something that you're going to learn in all business schools, exactly how it looks like today and why I love this. And I always use [inaudible 00:28:15] starting a new engagement with a client is because it's a visual one pager that shows the building blocks of how your company works.

Carolyn:
Again, whether in house or you're client side, this is a thing that you can use for any company. And this is exactly what it looks like coming from out of business school. And again, as I mentioned, at the end of the day, all companies very, very simply put their goals. Or would you say the two things driving the top line or driving the bottom line? And I think this tool is very helpful in kind of understanding where you fit in a house helping them to achieve goals. But really this is broken down into five parts, understanding the infrastructure of a company. So who are the key partners and suppliers that you're working with. If you were to put like you're partnering with all the local farms, for instance.

Carolyn:
Where the different resources, so unique strategic assets that your business must have to continue to function and the key activities. What are the things that you need to be doing to deliver your offering or value proposition in the market?

Carolyn:
So again, those are probably things that a lot of us are not necessarily touching. I would say UX researchers are very much working in the offering sides around the product or the service and defining what the value proposition is. So what makes your offering compelling or unique, especially compared to other players on the market. And on the right hand side, we have the customers, we're doing a lot of the work and understanding. So again, channels, how are you actually reaching out to them? How are you promoting yourself and to communication, distribution or sales. Who are your customer segments? So how do you actually up the different cohorts of people that you're serving and the customer relationships, how do you interact with them?

Carolyn:
What are the different touch points across their user journey? And then the very bottom, which again, I think many of us are not in this world or space, which is the finance. That underlying pinning that help us deliver our offerings and create a product on the markets. And this is revenue stream. How are we actually making money from the value prop and the cost structure, which is what are the cost drivers, things that we're spending money to make the company function.

Carolyn:
Again, this is a rough, rough skeleton, but the way I use it, and the reason why it's helpful is because it can map all the different activities of company on this one page and create some coherent understanding of how your business functions. And then more importantly I think UX not work in a silo so much and say, hey, if we make this change into how we communicate with our customers in the channels section on the right hand side, how does that actually impact what that means for the cost structure?

Carolyn:
Does that mean we're spending a lot more money opening retail stores, for instance. How does that impact what we need on the partnership side? You need to build relationships with XYZ people. And that just shows that any UX decision you make a recommendation you make, it has an impact on all other aspects of the company. Some that you may not see, or you're not close to, because you're not sitting with the finance manager on the one side or head of BD on the other side, but there are concrete implications. I mean, this is a great tool for you and your teams to sit down and say, hey, if we have these cost changes or recommendations for our product or service, what does that mean for the rest of the company? What does that mean for our revenue stream or driving the bottom line on the top-line.

Carolyn:
So again, I think for people who don't necessarily have an MBA or strong business background, this is a kind of dumbed down one pager of how everything works and a great starting point for you to map out the different people and ways that your company is cushioning.

Ben:
Yeah. Brittany Esther really good question. What's the difference between power and influence? My background is in, I have a PhD in social science studying influence Cialdini. I'm in Arizona right now. I got my PhD at Arizona state, not with Cialdini, but I took classes with him and studied alongside. So that's a cool question. That is an entirely different webinar. I love it, but I think you can partially answer that question or at least glean some of that Intel by doing what Carolyn is talking about here.

Ben:
I know I can speak from dscout. We are really leaning into cross team collaboration when we're at a distance. I can't just peek my head over and yell a question to the product and your sales team. I have to now Slack or email them. Fact-finding can be done as McLean said, like buying a burrito or just like having a quick Zoom call or a Hangout with someone and asking them like, what are your OKRs this quarter? And that might be on an intranet or an internal Wiki, but to McLean's point and as a communication person, talking to people will give you all a lot of intel that you need such that there have been some questions in the chat about like, who is your CEO influenced by? What metrics and outcomes most influenced your CEO?

Ben:
Again, that's right up my alley as a com person. Like, you'll learn that by the approach that the engineering team takes. Are they terse with their responses. Do you hear that they are justifying the rationale for their work? Or are they just saying, well, we're doing it because X or we were asked to do it. So we're doing it. Is it a transactional nature? Is it relational? I'm asking you to be more of the UX people, nerdy people that you are doing what Carolyn has presented here. This canvas will, I think, get you a lot of that secondary and tertiary intel who influences whom, what are the processes? And you might already know these things, but mapping it out could really add some drive to the initiatives you take.

McLean:
And Ben, just a quick followup on checking the great questions here in the Q&A. There's a few around, is it worth getting an MBA? I'd say looking at this kind of I'm like, oh yeah, that's what I learned. That's what it was. I'd say real quick, skills over degrees.

McLean:
I really mean that, I'd say candidly, a third of manmade program was incredibly valuable in learning statistics and finance and strategy, business law. And some of the other things weren't 100% applicable. And again, Khan Academy has a great free finance course, go take that. You'll need an IPA or a glass of red wine. It's a little dry. But that's a great resource. I really love mini MBA programs, what Carolyn does, but also with institutions. There's great online mini MBAs that pack in a year and you can stretch it out if you really want to. So at the end of the day, I'd say like, learn on your own what you can if you love the structure and what you're doing, then jump in further. And I think for a lot of designers, they're like, "Oh, we don't like math." "Oh, I don't do that." You just did complex fractions with aspect ratios in the grid. It's just an educational gap about learning these things. So try the skills, if you like it, then maybe go to this instruction and education.

Carolyn:
Yeah. I can also add that something I was very heavily weighing whether I was going to go through an MBA program and especially after a couple of years working in consultancy. And the big thing, reason why I wanted to, again, was triggered because of that time, the PM called me out of why I was sitting at the table and it was really to build credibility for myself. And even though my practice and expertise is in research and ethnography and the social science methodologies, I hope that I bring a lot more to the table for clients. I thought an MBA would give me an automatic kind of stamp of approval kind of ability.

Carolyn:
I think what I've seen throughout the years, I did not get an MBA. So a lot of the learning that you can do on your own gives you that credibility. So if you're speaking and using the language that your stakeholders or clients are, they're immediately going to under see, and I believe that you are more than a "UX practitioner" that you understand their business goals.

Carolyn:
You have empathy for what they're trying to accomplish. And actually one of... A couple of days ago, I got a discovery call for a potential new client. And he was saying really our end goal is to XYZ. And he said, from the way you're speaking, I understand that you have a very underlying commercial layer and that is maybe for some people, a huge turnoff, but for me, something that I am proud to have, and to me, I think that as practitioners need to be speaking that type of language. So using words like differentiator or conversion or value, pop, concrete things that you are going to be reading in the annual report and being able to somewhat kind of para or mimic that shows you have that understanding builds that credibility immediately. And I think those are some of the smaller tricks and tools that I'm doing to show that I understand the larger kind of business problems and areas where my clients are struggling with.

Ben:
Quick interjection, Carolyn, McLean, can you stay after the top of the hour for about five, 10 more minutes just in case. Okay. So folks, if you have to jump in 15 minutes, because you've got another meeting to go to, don't worry that you'll have the recording. We will also send you Carolyn mentioned ILX, and I think the Enterprise UX, both organizations that I've had the pleasure of attending and working with super smart. So we'll make sure that you get Carolyn's course as well as McLean wrote a really interesting article for smashing magazine about a lot of the things that we're talking about.

Ben:
So you will have tons of resources. If you want to dig deeper, we'll make sure that you have Carolyn's info, McLean's info. And some of the things that they've written on this. So let's move now from sort of sketching out and again some of the communicative secondary things that you can get to this, the diamond of strategy Carolyn. Walk us through what we got here.

Carolyn:
Yeah. I love this. This is the gold standard for understanding strategy. I highly recommend everyone reading the article by Hambrick and Fredrickson. It's called The Strategy Diamond. And basically this is again, a very quick visual way of cutting all the different parts of the organization strategy together and the way they frame it is. If a company has a strategy, the strategy must have a parts and the parts all must be cohesive and support one another.

Carolyn:
And again, this is a great tool that I use when I'm starting any project to map out, where are the different arenas of where the company is active or the different vehicles for how they're getting there, the differentiators for how we'll win. I know McLean is going to talk a little bit about that down the line. And the seeding, which is our sequence of how we're going to move, make decisions, moving on market and economic logic, which is how returns will be made.

Carolyn:
So again, this is something I actually do, even with my clients, because if you ask anyone what a company's strategy is, I 100% believe that you're going to get 10 different answers and no one's going to be completely aligned, especially the larger, more enterprise companies as they are.

Carolyn:
And a really great starting point is when you and your teams or collaborators are all on the same page of where we think the company strategy is going or where we think they're making the big bets or where their assumptions are for how they have chosen to act in the market. So this is, again, the starting point for when I start any engagement is mapping these out together with my clients or with the teams I'm working with. Saying do we have a shared understanding of what the goals are? What kind of decisions that they've made, and what do we want to challenge with our research? What do we want to challenge with our recommendations down the line? And they won't say anything for especially newer practitioners. This is a great place to make sure that you understand how your cross cultural teams, if you're working with a PM, for instance, or working with engineer, understands the world and the market. And so it's, again, tools that you can use cross-functionally to make sure you come to a shared understanding. And this is something great article Hambrick and Fredrickson that I highly recommend everyone read.

McLean:
Just real quick. I'm connecting the dots sometimes between strategy and research, because I know it can feel like stepping on toes a little bit. The only thing that I kind of add is it's the old adage that Henry Ford said, if I had asked my customers what they wanted, they would have said faster horses. But I think as you kind of look at UX research, especially talking with what Carolyn's talking about, you're seeing this huge shift to like evaluative research, because it's a little more quantifiable.

McLean:
And so you really haven't seen as much like generative research. And obviously D Scott does an amazing platform. It's solving some of those pain points. But when you're looking at generative research, I think organizations intuitively understand the value of anticipating customer needs and reinventing and seeing one head of the market. It's kind of whine that flakes is what they are, is they continue to see, understand customer needs. Re-invent the users and stride. The thing I would say is don't forget about generative research, it's a great way to be a secret sauce to get one step ahead of your user. And with that then you can kind of articulate it as a way of getting ahead of the market.

Ben:
That's awesome. All right. As someone who works in the UX space, I'm loving all the guides and the worksheets and again, you are going to get these copies of these so you can find them. We'll make sure that that article that Carolyn mentioned is linked out as well. So what are we looking at here? This one is Porter's generic strategies. This one's from you McLean, is that right?

McLean:
Yeah, Michael Porter. He's like the LeBron James of thinking sports ball whatever the analogy is. But just a couple of quick things. I'd say if you looked at my annual performance reviews for my MBA, the thread would be McLean needs to be more strategic. And all of our titles are now strategy, innovation, et cetera.

McLean:
And I was always just like, well what is strategy. Is it like big ideas? Do I need to be like an Oracle? Is it planning? How do I do this strategy thing? And for me, Michael Porter just had... He comes up with three generic strategies that I kind of find is something that I fall back to when I'm starting to think okay, how are we going to shape this strategically? He has three simple strategies, but it's like if you do this then that, and briefly, clearly Porter wasn't a designer because this grid thing can be a little hard to float around.

McLean:
But generally he'd say this. One is low price. Low price is a great strategy. We are the lowest price in the market. That's where we're going to be. Porter would say, great, if you're low price then you need to have lots of volume, like a Walmart. You need to sell a lot of things. You need to have contracts to make sure your costs are fixed.

McLean:
You need to have incredible volume. So low price is great, have high volume. The second one would be narrow segmentation. So my dad got his hip replaced and there's these little screws in it and one company does 99% of all those screws for hip replacements. So it's called narrow segmentation. They own the entire market. Porter would say that's amazing, but in order to do that, you need to build a moat and make it really hard for other folks to get in there.

McLean:
You need to file patents, you need to get ahead on research, you need to... Like that's how that strategy would work. And the last one he would say is differentiation, right? And I think that's really where a lot of UX researchers and designers can break through. And I think the classic example is Warby Parker, right? Like buying eyeglasses five years ago you'd go into a mall, it's super bright. You're putting these things on, you're asking the sales reps, you're like, "Does this look good?" And they are like, "Please don't."

McLean:
That's how you bought glasses. And it was this really expensive unempowering experience. And what Warby Parker did is they work backwards from the ideal customer experience. People said they want to try them at home, they want to try before they buy, they want payers. And what they did was they'd worked backwards from that ideal customer experience, but then they changed the underpinning of the supply chain behind it too. I think they get credit for the front stage, but they should get credit for the backstage as well. And so often people are like, well, how do I differentiate? We'll start with the ideal customer experience and that can inform kind of how the backstage supports that. And particularly again, in today's economy it's those players that are going to come up with new experiences are the ones that continued financial success.

Ben:
That's fantastic. Are there, let's see. Okay. Right. Well, we'll get to the next. This was one that we've had a lot of questions leading to. We've had again, folks talking about. So we've got some strategies on how you can start to sketch and map out the organization players and strategies that you can use for translating some of your work. Now, we're getting to an ROI calculator, which should make many stakeholders ears burn. So McLean, walk us through what this is and how someone out there could potentially start calculating the ROI of their work.

McLean:
Yeah. And everyone's, this again a little mathy. So let's just take a big cup of coffee.

Ben:
Okay. Here we go. I love it. I love it.

McLean:
And Carolyn, you've been doing this probably longer than me, so feel free to hop in as well. I think at the end of the day what we're getting towards is you can't just show up to a meeting with stakeholders with a research plan or a full prototype.

McLean:
And at the end of the day, even in my own career, like the value of my MBA and what I learned wasn't my even ability to understand or speak the language. It's my ability to understand but then apply it through the lens of a design thinker. That's the real secret sauce. Because we see the world differently and we see the world from a consumer standpoint. I'll get into this, but just kind of articulate how that works in the real world.

McLean:
So I took a job at Expedia. They put me on the flights product. Flight is like intensely commoditized thing. And they're like, we need to de-commoditize flights. And I was like, I don't know what that means. So I did what I said, I met with someone from investor relations and what I found was that when you buy a flight on Expedia, basically the company only makes like seven bucks a flight. Even if it's like a $500 flight, they only make seven bucks. But the cost of acquiring a customer can be like 42 bucks because when we buy flights, we look at like 42 different things and we fly around and we look at a bunch of different stuff. So it didn't take an MBA to figure out like, whoa, seven bucks to earn revenue, 42 bucks. Like how do we make up the difference?

McLean:
Well, they make up the difference by selling hotels and rental cars and stuff like that. But we really thought that flights could be like a good stand-alone revenue generating product. So understanding those dynamics, we're like, well, where are we losing margin? And we lost it actually in like customer support. We found most people through our NPS studies, were calling in because they didn't have transparency and fees and pricing and all that.

McLean:
We'd see things like international baggage fees. You're like, what's that? And people were like, if you've ever seen someone throwing shirts away in the airport, that's international baggage fees. Because what was happening, it was the carriers and the deltas thought that they were kind of saying it. And Expedia was, and everyone kind of knew about these fees and pricing except for the customer.

McLean:
And then they'd call in to the point where even if we sold the thing, we'd lose money on the call. And it's like, that's an unsustainable way to run a business. And so for us what we did was hey, we think there's ways that we can articulate better transparency about flights, about pricing. And we laid it out, good experience map, nice little UI. But then we stack up a really good business case behind it and we said this will increase conversion by half a percent. This will increase organic repeat by 2%. This will bend customer costs by a third of a percent and that scale lets tens of millions of dollars. And so we'll say, hey, this initiative might take two teams, five designers, 10 engineers, yeah, that's a half a million bucks.

McLean:
But over the course of three years, that's going to be 9.5 million in net income. And so at that point it's arithmetic. And so what I'd say to start to stitch together your ROI calculator two things. One, just like Carolyn said, get good at P&L. Be able to read a P&L statement? And two, I think the missing piece from designers is actually just using the information we have in Google analytics.

McLean:
So much of our Google analytics is like pay per click, all inbound marketing. But we really don't take the time to understand what does that mean at the end of the day for users on the platform. We can do better than a 1% conversion rate. That doesn't have to be industry standard. So often if you take what you learned from your P&L and synthesize it, it get some kind of platform analytics, that's how you can fuse them together and start to articulate business cases in terms of the organic repeat and curb conversion boost, reduction in cost savings. And it's like Spanish, it's a language. The more you do it, the more fluent you're going to get and the more persuasive your business pieces are going to be.

Ben:
Are there examples of times where you've had a difficulty getting access to the numbers McLean to fill in some of this. And if so, what would you have done? Or Carolyn, when you're working with a company that might not maybe reveal to you these numbers when you're trying to calculate an ROI, are there other strategies that you might employ? Yeah, there might be, there might be, yeah.

McLean:
Carolyn, I'm sure you've dealt with some opaque spaces.

Carolyn:
Surprisingly a lot of my clients are very open and they're more than happy to share their numbers or strategy docs with me. Again, this is to help me help them do a better job. And they've never really encountered with that luckily. And I would say the most important thing though for someone who has a research background and I'm not plugging in numbers on a day to day basis, is to build strong relationships with the teams and who are. Again, as I build them into my own field work and research a process, I'm hoping that they build me into their kind of investment analysis process as well. And then what kind of both aligned at going and pedal texts together.

Ben:
That's great. Yeah. Oh, go ahead.

McLean:
Oh, just real quick. I'd say. Yeah, when we work where the data might not be available or it's early stage that's where good kind of usability metrics can come into play. At the end of the day if you're kind of doing a task analysis and it takes someone 16 minutes and 312 clicks to complete a core function that still resonates within itself. And to see even at that level of like, hey this initiative is going to shave time on platform by eight minutes, reduce this amount of clicks. That's persuasive within itself and it might not be tied directly to a metric, but at that level people aren't going to understand and fill in the gaps especially like good critical thinkers.

Ben:
I wanted to mention we've been getting some interesting questions about like, but what if I don't know what the conversion rate is going to drop to or increased by? And I think that's our natural inclination as researchers and design thinkers to be like, "Well I'm not going to make a statement until I have the evidence to." When again thinking about audience analysis for a business folk, they're about moonshots. They want to be able to make strong projections. To Carolyn's point, they are going to turn around maybe to their board or their shareholders and say we've got great big goals. I mean Elon Musk's entire business model is making wild predictions and then getting 80% of the way there. 60% of the way there. I don't think it's about being right, I think it's about making informed conclusions based on available data to the extent that's possible.

Ben:
So McLean is talking about, if you know you're losing X amount of users on this page, multiply that by the amount of users that you regularly see visiting that page over a quarter or a month and then you've got like something to go on. Again you're just making educated guesses but to Carolyn's point you're speaking in their language. That's the point here, you're advocating for your work and yourself using metrics and outcomes that they understand. And part of that is that they know it's not exact. You're giving them a ballpark and hopefully they're interpreting it as a ballpark. I think it's quite interesting Carolyn the companies with whom you're partnering and working are giving you that intel. That doesn't surprise me because that's what they have to turn around and then go sell to their shareholders, their boards.

McLean:
And they're making it up too.

Ben:
Yeah, exactly, exactly. Welcome to [crosstalk 00:52:01].

McLean:
They'll have all the information at the end of the day I stand behind our work. I think good design changes businesses and most of the time I'll say I'll take my 401(k) on this. Because I know that revamping this platform, a great looking UX, UI, well-informed is going to dynamically change the outcomes of this business and I'll stand behind it. And that the other day it's like judge me on the metrics next quarter.

McLean:
I don't care about what you think about the button color or what it looks like. Let's come back in the quarters and look at the numbers. I've never seen like improve UX, UI or business metrics. So you can stand behind it.

Ben:
I love this as our wrap up. And I think, again, it speaks to what Carolyn and McLean are talking about, which are all tactics rolling up to the strategy of audience analysis. Considering your message, think about what's going to resonate the most. And Carolyn, can you sum up this pithy, succinct slide here?

Carolyn:
Honestly Ben today we are people experts, people nerds and people are weird, crazy, fascinating. They're very interesting. They're often cool, sometimes not too cool. And often our research and design is based on what we saw in the field or how we understand the human behavior and that's what we're excited about. That's want to present to the team since we want them to know and understand about your user's needs and challenges. But very creative at the end of the day having an interesting insight or a cool product design. If it's not relevant to your business's goals or strategy, then it doesn't matter to them. And I think actually Chris Massaad of Copartners said something really amazing, which is if your insights are not driving the top line or bottom line, they're useless.

Carolyn:
That's actually verbatim words. I thought that was actually kind of harsh reality, which is, yeah, we have an inundated with so much data, so much information. But what we present to our teams and clients is to be very focused, very relevant and in line with what their goals are.

Carolyn:
And I think we often forget that because we don't know what their goals are. We don't know what their challenges are. We're focusing on our own little silo of delivering better user experiences. But again, making sure those two roles are collided, that we're translators and that we're speaking both the world of user, also the protocol, the business. So we're really going to stand out and become more respected and as well as elevate our own practice because we want to hone in which is relevant is not the same as interesting or cool.

Ben:
Yes. And I almost think you can supplant data does not equal insight here as well. So often UXR are asking, "Well we have all this great data, but where are the insights?" Or customers who are looking at the dscout platform will say, "But where are the insights?"

Ben:
Well, that's where you match your design thinking and acumen, your research background, your understanding of the business to create and pull. You leave lot on the cutting room floor. I mean especially if you're working in as Carolyn does with ethnography. I mean got pages of field notes, maybe hundreds of hours of video data. It's not all going to the stakeholder. It can't. And so for those of you who are still coming up against the like I have all this data, but what's the insight? The insight is what's relevant. The insight is what drives impact. I think there's necessary and sufficient conditions for data to turn into an insight. And I think Carolyn is hitting it on the head.

Carolyn:
I think so too. The questions I always ask myself before I present a deck or recommendation is, where is the so what in this? And then that where's the money in this? And again, these are very commercial things, but I need to understand and hopper perspective anytime I'm going from my clients and giving them recommendations.

Ben:
And then we have one final bit, which is if... I mean, this is our moonshot slide. McLean is going to talk about where it has been done. But as you're advocating for yourself, your work, your teams, you might find yourself climbing. So McLean, you want to walk us through who W. Edwards Deming is?

McLean:
Yeah. I think Carolyn kind of hit to that, that at the end of the day you need to be able to build a coalition. You can't work in a vacuum. And that requires leadership and that requires management. And I'd say two things I think designers... A third of my business school program was actually an organizational design and management. And I think designers incorrectly make assumptions around what management is from what they've seen previously. So few designers have actually been trained in management. So we kind of just pick up all these kinds of bad habits and that's what we're like, oh, we sit in meetings all day and fill out this. And that's not what management is and that's not what leadership is. And to really get things done, you're going to need to build a coalition.

McLean:
And to really get things done you're going to need good managers, you're going to need the organization that can facilitate and work through these strategies. So lean into management and leadership. I'd say just because someone did it this way doesn't mean that's your leadership style. Leadership is scaling your own vision and abilities with others. Two resources I'd really recommend. One Patty McCord is one of the founders of Netflix, a chief culture officer wrote a really brilliant book called Powerful. It really correlates culture to business outcomes, but like empowerment within itself. What does that mean? And what does culture mean? But here's how it actually changes the business outcomes of your company. That will really change, I think the way you think about leadership. And the other one I'd recommend is kind of grandpa looking guy, Edward Demi.

McLean:
He was tasked with going to Japan in post-World War II. And really helped develop the concept of lean as it related to manufacturing, which is really a reduction of processes through worker empowerment. And Patty McCord really took that and applied it to a technology company like Netflix, which is like massively decentralized, really about worker accountability. But Demi wrote this great piece called The 14 Points. I just think it stacks up great for how to think about leading yourself and the design organization. And he'd say break down barriers, work cross functionally, vigorous program of self-improvement. So make sure that financial analysts are coming into your team meetings and giving updates. And lastly, like make everyone part of the transformation. I think at the end of the day as designers, we can show what the world can be. And that's our biggest asset is showing that North Star and people want to follow that and that's where we can leave. So I'll leave it there. Checkout 14 Points and lean into management leadership and that's really how you're going to get broad change for your organization.

Ben:
Thank you so much to Carolyn and McLean. This has been an MBA in an hour and five minutes. We have we had a lot of great questions about ROI and success metrics. Find, seek out these people. I have had the pleasure of working with them the last four weeks. They are so gracious and giving of their time. Again, we'll make sure that you have access to both the educational leadership that they're doing, the articles they've written and the cool companies that they are making happen in the world. Carolyn, McLean, thank you so very much for your time.

McLean:
Thanks everybody.

Ben:
Take care everyone. Be well and stay well. We'll see you next time.