Design has become the largest differentiator most businesses have. Don Norman covered a host of everyday problems with products in his classic book, The Design of Everyday Things. He uncovers how you may not be alone in having trouble figuring out if a door “pulls” open or “pushes” open. It is a very worthwhile read and shows off the ability of Design to lesson the value in usefulness.

All businesses have some unique selling proposition for their goods or services too. There is something – besides price – that continues to keep their business in business. In a world where white collar jobs are done by people in far off times zones who have no connection to the customer – design may be the ONLY thing that differentiates your sales efforts. It’s not just techies offshore either. Today you find HR, scanning MRI’s, financial back office, customer service centers, and as much business process as companies are willing to send away. See examples here: Scanning, HR jobs, Call Center, Contact Center, Healthcare, and of course Software.

In an October Mass High Tech article, Richard Banfield wrote;

“Today, leadership faces an ever-increasing wave of new startups with fewer barriers to entry than ever before. Thanks to the decreasing cost of technology and increased access to microfunding, each of these startups begins with less overhead and less risk. Less risk means more potential competitors for the incumbents. Less than This 20 years ago, you could dominate an industry by simply building a massive infrastructure that would be too expensive or time consuming to compete with. Today, a feisty startup can eat your lunch using a bank loan and a socially exciting website.

To survive in a world in which your competitors are younger, faster and smarter than ever, you’ll need something else. You need a design strategy.”

Fast Company’s 2007 Master of Design Annual had more must-read articles and gave insight into great design minds like Philippe Starck and Yves Béhar.

“The style of tomorrow will be the freedom and recognition of difference. We must replace the name ‘beautiful’ by the name ‘good.’ Beautiful means nothing.” Philippe Starck

Meaning: good design is really about simplicity. It is about stripping out all the extraneous visual nonsense and leaving only the key elements needed to communicate clearly. It means designing only the necessary elements to make your product or service be preferred.

Massimo Vignelli, who founded Unimark in 1965, believes that

“It’s really more about logic than imagination.”

He and his wife Lella have done brand identity work for Bloomingdales, Ford, American Airlines and Knoll. But all of their most lasting work is SIMPLE.

Created in 1972 (before Adobe made graphic design easier for all) their New York Subway map is a perfect example of simplicity – and it was all done by hand. Each line bends at 45 or 90 degrees. Every line has a color and it was modeled after London’s underground map.

Design as a differentiator is not new – but it does have more believers today. Legendary Apple is one of the “True Believers” who controls the hardware, software and industrial design elegance. MIT’s Technology Review did a great story last year on why Apple’s success stems form their design culture. You can read the MIT article here. Robert Brunner says his team pushed manufacturers to find new solutions during his tenure with Apple industrial design. And bloggers write about Apple constantly in this role – including sending more tech business reporters to MacWorld each year.

1. Who should be next Apple CEO?
2. What we can Learn from Apple
3. Newsweek looks at MacBook Air

But even companies like Proctor & Gamble and SAS have claimed that Design will be one of the ways they differentiate in their marketplaces. And not just visually.

An older article in Bnet discusses the actual Value design can add to enterprises. The article shows how Design has 4 Powers:

1. Design as Differentiator
2. Design as Integrator
3. Design as Transformer
4. Design as Good Business

This is really where Design makes a difference: adding value to the equation of your business. Our own case studies have shown some correlation to the value of design. We have had clients increase online sales or decrease costs using simple web design. Getting measurable ROI from Design differentiation is the ultimate goal.

The next generation of tools from Google includes customized home pages with groups and blogs, mail and chat, spreadsheets and video, calendars and checkout widgets to name a few. More focused solutions come from the likes of Zillow where a consumer-driven real estate market is blossoming using these Web 2.0 ideas combining tax values, satellite images, maps and personal info that may dis-intermediate realtors in the near future. Check out the ‘Make me Move’ feature which allows you to advertise your asking price – even if you don’t have your house on the market.

A couple of recent reports from McKinsey and Forrester show that Web 2.0 tools are not just the hype of next-generation marketers, but are also being adopted in mid and large companies at a far faster rate than previously reported. CIOs are taking note and adding Web 2.0 tools to corporate offerings in the hopes of demonstrating improved efficiency both in and outside the organization.

Web 2.0 companies who sincerely ‘get it’ understand that they need to have a core competency in data management or collective intelligence. And to really become a Web 2.0 company, they need to allow end users to ‘create’ and not just ‘consume’ their information. Many corporations struggle with the need to allow users to publish and the result is enterprises have embraced the Web 2.0 tools they can have more control over – but are not finding as many uses for the peer-to-peer and social networking elements. Dion Hinchcliffe’s recent ZDNET blog has this understandable diagram segmenting the Central production vs Peer production views.

Business tools are being leveraged in intranets and development areas, but the true collaborative knowledge sharing has yet to reach outside for many corporations. Exceptions include the types of all-in-one web services tools like NetSuite which allows a mid-sized company to throw away a whole smorgasbord of software titles for one rentable online tool set that includes financial, purchasing, payroll, CRM, web site, e-commerce, sales force automation and marketing campaigns among others. These types of Web 2.0 tools allow far-flung employees to collaborate and see real-time information in ways that took thousands of man-hours and custom development just a few years ago.

Interestingly, one of the discussion points from the recent articles claims that CIO’s really want one vendor to deliver all these Web 2.0 tools. Or a mashup with one service center maybe. One decent example is found in ConnectBeam

Another is En.terpri.se which is a BEA product making it one of the first enterprise packaged solutions delivering Web 2.0 answers for corporations.

Smaller – more specific project management tools like Copper and Basecamp have grown organically because they do one thing well. Smaller businesses have jumped at the ability to quickly shift their operational needs to a rentable solution like this. As these Web 2.0 concepts share their code they will extend the software. One example: Blinksale (an online invoicing tool) allows users to leverage their client data directly from Basecamp. In fact many more products now integrate with Basecamp because of the shared API.

This web site is a collection of Web 2.0 ideas allowing us to leverage tools like Radiant for overall web site Content Management while plugging into Typo for the blog engine. Open Source tools like these can be grouped almost at will with a little technical imagination.

Ultimately all Web 2.0 businesses will need to open up parts of their information that they have historically kept closed. Successful companies will engage customers in dialog – and allow them to create and publish dialog along the path to corporate success. These customers will share in the success or failure of the ventures in a much more compelling fashion than even the recent past.

The fact is there is so much more information available now – that we need intelligent design of it – and advanced filtering to see for ourselves. Reading my daily blogs and info updates I have recently seen a couple of interesting articles on the history of the Graphical User Interface. Of course, there is a wikipedia entry, but also a nice collection of GUIs found here as well.

At Macworld 2007, Steve Jobs rolled out the much-anticipated iphone (naming rights still pending;-) with a very slick user interface that only requires our fingers. This type of touch-screen interface already has competition from Microsoft, GE Healthcare, Mitsubishi and brilliant engineer Jeff Han who made his debut last year at TED 2006 and then had his video downloaded a quarter of a million times from YouTube to become on of the most popular tech videos of all time according to Fast Company.

Last week Guy Kawasaki riffed on the The Art of Visualization where he pointed to some very cool third-party graphical representations of his book The Art of The Start. He also linked to the Periodic Table of Visualization about how data and abstract thoughts can be visualized. I recognized many of my thoughts (and way cooler diagrams) on how we can visually explain our client’s businesses.

This visualization clarity is related to our love of Tufte’s information design books. The poster he sells of Napoleon’s March on Moscow in the Russian campaign of 1812 may be the best example of complex data being visually displayed for laymen to understand. Tufte offers an excellent course if interested.

Boxes and Arrows (with a brand new web interface themselves) has an interview online with Barry Schwartz, author of The Paradox of Choice “The problem used to be, ‘how do we get information out to people?’ That problem has now been solved in spades. Now the problem is, ‘how do we filter the information so that people can actually use it?’”

One answer: user-centered design with multiple avenues to find the information that solves their needs – when they need it. Information Architects and Web Designers should all start with a better understanding of their audiences. Those personas and user profiles are not steps to be skipped, but instead are steps toward visual design that works.

In User Interface Design for Programmers, software guru Joel Spolsky describes it as:

“When you’re thinking about user interfaces, it helps to keep imaginary users in mind. The more realistic the imaginary user is, the better you’ll do thinking about how they use your product.… Thinking about a “real” person gives you the empathy you need to make a feature that serves that person’s need.…”

So how do things really look to your users? In this recent post from Joining Dots they have an interesting quote from Larry Bassidy, former CEO of Honeywell:

“Ask a CEO what kind of culture they have and they will describe the kind of culture they want, as if it exists, instead of describing what is really going on.”

They go on to wonder aloud if companies really “want” a user-centered design or collaboration and knowledge sharing or whether companies really want to impose guidelines within which users can publish intranet material. A difference between what they say and what they do.

Actually creating useful pages is far harder. We have found in user tests of our own web development, users say one thing and actually do another (they also frequently overstate their web-savviness – but that’s another topic;-). So just how can a developer use audience information and user personas to improve the visual medium? We all must have a more thorough understanding of the way people will use our sites and web application pages. Too frequently client directives like marketing, advertising, corporate opinions, and most often “how they sell” stand in the way of creating truly useful interfaces to “why customers buy.” Solve that one and your web application has a far greater chance for success.

Start 2007 with a renewed push for the way things look. Make resolutions that make you look at things differently. Review the masters of visual display who have solved far greater problems with elegant solutions. Have your newsreader search the web for useful insight. And don’t settle for “because that’s how we have always done it.” It’s all new again.

Too many companies start their their online shopping experience with how the company is set up. Corporate organizational charts (focused on the inside view) take over the web solutions. Commerce stores are set up in the same silos that the company uses for financial reporting purposes. You can almost tell the organizational chart by their sales solutions.

Our experience with financial service companies finds that products and services are typically separate entities in the corporation. As a result customers need to self-select into the types of products that make sense for them. So depending on the level of knowledge a customer has, or the entry point to the site, or the targeted advertising banner rate quote, the customer quickly gets to a solution – just maybe not the best solution for them.

So how does a company understand that the potential site visitor needs to finance his daughters wedding? That ‘product’ doesn’t exist on a bank site. The solution may come from an “Any Day” loan, or an Equity product or a Card Product or some sort of unsecured borrowing that can only happen when the bank listens to the need. That kind of listening can only happen by improving customer relationships.

If you are trying to improve your site for the Holidays you have probably missed the window for a major redesign effort which could improve your online relationships. But what you do have time for is improving what you have right now.

This Holiday season more companies intend to improve their relationships with some old fashioned technology – and still the only ‘killer app’ – email. In a recent WebTrends survey 80% of retailers stated that regular customer email is their preferred method for building relationships.

There are tons of email marketing sites that can help improve yours, but this recent article shows 3 successful ways to improve response without using discounted prices as the driver. Make your emails relevant; Time them to the season’s buying habits; and take advantage of key repurchase behavior. Repurchase behavior is key since it means you know about your customers.

More companies improved customer relationships this year with the addition of live chat and personalized promotions. Look at Bank of America’s Mortgage. The minute you land on those pages, a liveperson pop-up asks if you need assistance now. Liveperson did small sample interviews that showed users spend an average of 20 hours online each week and that 17% of the time is dedicated to research and comparison of products. Those shoppers spend more than $1000 online each year.

Customer relationships are expensive to start and invaluable to improve on. Use the information you have right now to improve yours. Why do customers buy from you in the first place? What parts of your site are most popular? Are there repeat sales of similar items? Do your customers ask for items that you have but can’t be found on your site? Can you cross-promote similar items better by using existing customer data? How can you better solve the needs of site visitors?

Someone once said that web users can really only do 4 things on any web site: Research, Purchase, Entertain themselves or Flee.

Help your customers research and purchase from you. See if you can’t speed up their getting information from you. Conduct a series of conversations with them through email or personalized content on your site. Use your ears and listen to what they need. Do everything you can to avoid the last of the 4. Flight means no return.

Take the steps to make sure your customers enjoy their Holidays.

The dollars and cents part of the equation is maybe even harder to fathom. Costs are rising at rates 2-5 times the cost of living. Small business can’t afford to face 20+% increases each year for their health care. U.S. health care costs have risen from 4.4 percent of Gross Domestic Product (GDP) in 1950, to 9 percent in 1980, to 12.4 percent in 1990 and to 15.4 in 2005.

In this country we spend more money on health care than any other in the world and yet the result is many are forced into bankruptcy (Health Affairs article) We have a much higher obesity rate that any other of the 30 countries in the Organization for Economic Cooperation and Development and rank in the lowest third in life expectancy and per capita number of physicians (2006 OECD Health Data) in that group. Are we getting what we pay for?

Fortune 1000 companies are removing the lifetime health care benefits that our parents assumed because it is bankrupting them. The Ford Motor Company unbelievable announcement of early retirement packages for 75,000 employees is now being criticized as maybe not enough. In a Detroit Free Press editorial one of the concerns raised of the cuts is that unless the company gets major concessions from the unions largely on health care and retirement costs, Ford may need to make even deeper cuts in 3 years. (Free Press Editiorial article)

Demand is the third leg of the stool. With the first of the baby boomer generation turning 60, their tremendous numbers will stretch health care in the US for the next few decades. Even now the industry has become perhaps the most influential one in our economy. Michael Mandel quotes in a recent BusinessWeek article “Healthcare Economy” that 1.7 million jobs have been created in the health care industry since 2001. The rest of the private sector have created none in comparison (BusinessWeek article).

So its easy to agree that it is a big problem. What better way to make a big problem smaller than to make it easier to understand?

Many more Americans are opting to work on their own and will face the task of insuring themselves. Health care needs to become like retirement plans – something we all take charge of.

Enter – Consumer Driven health care and the chance to all of us to more firmly understand that each trip to the doctor’s office doesn’t just cost the $20 copay.

Consumer driven plans and tools are giving consumers more information and the chance to shop for services. Quality care, risk assessment, personalized health info like claims data and rx prescriptions gives average user the chance to save money by making intelligent health care choices. In a PricewaterhouseCoopers (press) release, the summary is that the “Current health plan trends to promote provider pay-for-performance, transparency, consumer engagement, and healthy lifestyles have the potential to mitigate future cost increases and address some root cost drivers.” In other words, if consumers treat health care like they treat every other major purchase they make maybe the costs can be managed to a more acceptable curve. And the only logical choice for making that “research” function really rich is online.

Consumers for health care information come from all walks of life. In user tests that we conducted for hospital systems, we found at least 11 different types of online user for health care information. They range from people nervous about delivering their first child to those who need nutritional information (ie diabetes) to folks worried about a loved one going into surgery. They have various levels of internet savvy. They all have a need to find the information that will lesson their anxiety.

A collection of links to third parties doesn’t do that. It is more confusing. An entry screen designed by the back-end data base team probably doesn’t get it either. An enterprise solution has far too little customization in most cases. What we have found it boils down to is design that is simple to use – for everyone – and easily understandable.

Consumers want choice in everything else they purchase. And the internet has been a boom to informational gathering on consumer products from books to music to automobiles to homes. It is about time we all think about health care the same way.

Content from 2003 Opinion – Last Mile is the Interface

During the telecom build out, many access-providers estimated the huge cost of building out fiber to the end user, commonly called the last mile. Specifically the last mile of fiber to our houses was estimated to be exponentially more costly than the corporate build out that was well underway. Today fiber is currently available in many downtown locations, but is generally less available to other customer locations because of this cost (as described here).

Many ‘last mile’ projects went unfinished with the collapse of the dot-com boom, but more of the general population has Internet access today than ever before. Internet usage is now approximately 59% of the American adult population and has not been severely hindered by the lack of fiber to our homes. (Pew Internet & American Life Project)

It is the rare consumer today who can imagine a world without Ebay or Amazon. Cisco and Dell have sold billions of dollars of their gear through their web sites and without the intervention of any salesperson. And the medium is truly still developing.

Entire markets have been changed and retail may never be the same again. Who hasn’t comparison shopped online this holiday season? Houses, automobiles, electronics, and many more luxury items can all be researched and purchased online. And as a result, corporations continue to spend on developing next generation Internet applications. Internet developers are still spending billions (or trying to save them using offshore development teams) to improve their features and functionality.

But, there is a tremendous disconnect as companies try to enhance their online offerings without real customer inputs. Internet technology cannot magically make these companies better. Customer inputs can. The ‘Last Mile’ of successful Internet development is not broadband or fiber access – it is applications that work the way customers expect them to.

User-focused development means connecting business goals and user needs into a cohesive easy-to-understand solution that simplifies transactions for online users. This process also happens to give the highest return on investment for corporate clients.

According to Jakob Nielsen, “on average across many test tasks, users fail 35% of the time when using web sites.” (Nielsen article) His data shows that users accessing web applications only succeeded 45% of the time. And the holy grail of online goals, shopping on e-commerce sites, was only 56% successful. These are failing grades for any business and those types of results are costing companies billions of dollars in lost online sales.

Forrester Research showed where positive online experience leads to loyalty in their June 2001 report. “Forrester’s Consumer Technographics® data shows that 42% of US Web buying consumers made their most recent online purchase because of a previous good experience with the retailer.”

It makes sense. Do you return to stores where you get poor service? The Internet is a medium capable of serving our needs immediately (with a slight lag for shipping). Successful e-commerce sites take customers completely across the advertising spectrum from awareness to preference to purchase in a seamless manner. The smoother that process, the more online sales result.

Research from various sources has shown that simply by providing sufficient product information at the right time, you can dramatically increase online sales. UI Enginerring did a study in 2001 that showed a 225% increase in online sales as a result of this tactic

As your company evolves your online applications, focus on the “Last Mile” and ask the hard questions. How can we make this easier for our customers to do business with us? Customer-focused answers will amaze even the most frugal technology planners as they watch their investments start to pay off.

Now it’s all about instant gratification. Who wants to be a millionaire? Everyone. Who wants to work 40 years to earn the security that comes from being a millionaire? No one. Smith Barney had it right 15 years ago: “We make our money the old fashioned way… we earn it.”

That message is passé today. Boomers want youth in a pill. Youth wants instant clout. Society wants fitness in a bottle. Lose 10 pounds this weekend on the Hollywood Diet. “Eat-anything-you-want-and-burn-fat” infomercials promise all that and rock hard abs in three minutes a day. What ever happened to eat less, exercise more?

Business caught the same disease. Employees demanded stock options and unrealistic salaries. It became less about working for something, and more about being due those perks. Executives blindly followed Internet fiction. And companies foolishly paid ridiculous amounts to get it because they were scared their competitors might beat them to the promised land, scared that the startups’ “increasing returns” rationale was indeed rational, scared that without being the first to market they would be forced to pay a huge multiple of the newcomers’ costs.

They were scared because they didn’t have all the facts. Nobody did.

Intelligent people invested serious money in terrible ideas, ones that didn’t make sense for any economy. How many pets do you know who shop for food on the Internet? These ideas were based on the “dollars for eyeballs” falsity that after building market share, a company could achieve increasing returns. Profitability would obviously follow that.

The media fed the frenzy. Suddenly IPOs, stock options and exit strategies were in fashion. First time entrepreneurs told the world (and many actually believed their own press) that they had the skills necessary to run public companies. Unbelievably, investors didn’t balk. Even more farcical was the notion that only time stood in the way of these ventures putting stodgy brick and mortar companies out of business. Few pundits bothered to mention that the old school companies had actual paying customers.

The fiction continued with valuations that were just plain ludicrous.

Somehow many believed that “best to market” no longer mattered in the face of “first to market.” And venture capitalists did little to lead protégés with time-tested business acumen. Many individual and institutional investors believed—mistakenly—that those companies’ fantastic success was based on talent and not timing. Today those same investors must decide which ideas have any value and which should be cut off from further investment. It should be an interesting tax return season.

A few sobering links may further qualify these ideas. The Internet Wasteland chart shows more than 250 companies whose value has dropped over 90% in the past 12 months. Investors will ultimately decide their fate.

Others may not be so lucky. A recent Industry Standard article lists more than 250 publicly traded firms in danger of being delisted by their stock exchange. Delisting is death for a public company. Most mutual funds and hedge funds do not permit ownership of stocks not listed on the major exchanges. And there are not enough individuals interested in penny stocks or pink sheets to merit keeping those businesses afloat. The public trough is dry and these companies are dead. They just haven’t locked the doors yet.

Supply and demand, monetary policy, interest rates and wage expectations: it seemed so complicated and “old school” in college economics class. It seems so clear today. The markets work. And it takes hard work to build businesses that survive in markets.

Welcome to the new millennium, when the economy matters, just like it always has. When success depends on the simple time-tested theories of supply and demand. When customers have more information to make better decisions than ever before. When Internet technologies further enhance the ultimate decisions of those customers—buying decisions.

And when common sense makes a most welcome comeback.

Many of today’s business headlines are garnered by companies that have sold their souls for startup money. Instead of taking the time to define their core values and build a solid business foundation, Internet companies are jumping right into the development of glossy business plans and slick marketing tactics. They have marketing departments and PR firms, but no sellable solutions. They have ideas, but neither the knowledge nor the ability to carry them out. They have sales organizations, but no service understanding. They hire resumes instead of people.

They don’t understand what a true Internet company is all about.

The fact is, a true Internet company is no different from any other successful business in that it must stand for something; it needs core values. It needs focus. It needs a spine. Despite what you read in Internet publications and the popular technology trades, true Internet success is based on the fundamental principles of service, quality, knowledge, relationships, commitment, innovation, individual respect and integrity. A true Internet company isn’t seeking funding.

A true Internet company reinvests its earnings in the people and the process. It is made up of individuals who genuinely understand the medium—because they believe in it. People who are missionaries for the medium, not mercenaries for the dollar. People with years of exposure to the evolution of the Internet. People who weren’t insurance agents last year or real estate brokers in March or investment bankers last month. They “get it” in a way that newcomers will not understand for years. They believe in the medium, not just the paycheck or the stock options or the BMW.

True i is the guiding philosophy at Vialogix. It is a belief system based on the understanding that the Internet has fundamentally changed customer relationships forever. Companies used to be in control of the information—but today, customers are in charge. True Internet companies develop solutions for those customers. They don’t confuse the business model du jour with the fact that success comes from having a solid business plan based on serving those customers.

A true Internet company uses a browser or a WAP phone or a PDA to deliver compelling information. It uses those same tools to reduce costs and share information with employees and suppliers and customers—and it has done this for years.