Design Is Systems Thinking

Product and context are one.

In 1969, Sony introduced the Digimatic clock radio, an analog clock in a neat rectangular wooden box with a digital-like display featuring flipping numbers. It looked great on a night table. A decade later, Sony scored again with the Walkman, the portable cassette player that prompted a music revolution, of sorts. It wasn't necessarily a technological leap, because portable tape recorders were already available, and Sony simplified the portable tape recorder by taking out the option to record anything. But Sony smartly marketed the Walkman to ordinary folks as a device that let you take your music anywhere. Sound familiar? It's a concept that Steve Jobs and Apple would later exploit with the iPod.

We know what happened to Apple. But where did Sony's innovative streak take the company? For a number of reasons, Sony gradually lost its way after the Walkman because it lost touch with what customers wanted. Sony made no effort to integrate hardware and software, or move toward convergence of content and services, the defining trend of the Internet era. By early 2012, Sony had become a marginalized player. And after four straight loss-making years and its stock at a two-decades' low, the Wall Street Journal noted that “Sony is struggling to match the speed and production might of Samsung Electronics or deliver the category-defining innovations of Apple.”¹

The Sony Digimatic clock radio was one innovation in a series of big winners for the company from the 1950s to the 1980s. Image: Courtesy of Sunday Drive Vintage, Amy Jung

While Sony has struggled, Apple started 2012 with its stock at an all-time high. Its market value surged to over $400 billion, bringing it neck and neck with the oil giant Exxon. Apple's cash horde totaled over $100 billion. Of course, it was great products and premium prices that helped swell Apple's bottom line. Yet the foundation of Apple's financial success is also based on its ability to link products to the experience around it and to sell all the other stuff related to that experience. Apple makes money off the product as well as the context that surrounds the product. Instead of churning out dozens of look-alike products for narrowly defined markets, Apple brings out only a few great products and extends the context around them with more products and services in what is euphemistically known as the iUniverse.

That universe never stops expanding. By the first quarter of 2012, Apple had sold more than 25 billion apps from its App Store. More than 16 billion songs had been downloaded from iTunes (a number that CEO Tim Cook gleefully compared to the 220,000 Walkman cassette players that took Sony 30 years to sell). All those beautifully designed Apple products were being sold in more than 300 beautifully designed Apple Stores worldwide. The context and the experience are the ways Apple keeps itself situated directly in front of the customer—in the fabled catbird seat—because the customer not only needs the product but all things related to it.

Creating context is not an idea that originated with Apple, although in my mind it has shrewdly elevated context to a new and lucrative level. In an early iteration of the concept, Eliel Saarinen, the influential twentieth-century modernist architect, put it this way, “Always design a thing by considering it in its next larger context—a chair in a room, a room in a house, a house in an environment, an environment in a city plan.”² He was describing the way an architect thinks about context when designing a building, as well as the intrinsic, interlocking relationships that exist between the smallest components and the space around it in ever-expanding circles. Apple took that idea, which I call zooming out, and ran with it. Zooming out and away from a problem to see the bigger picture is an activity that takes place in the right brain, the home to most creative thinking. The opposite of that is zooming in, which lets you observe the smallest details of a problem in seeking a solution.

SYSTEM DESIGN

Apple orchestrates every small detail that contributes to how the customer perceives the product, from the perfect packaging to the interior design of its retail stores, where free-floating glass staircases and color-coordinated T-shirts worn by the staff are all part of the carefully constructed environment. Apple zooms in to see the immediate world adjacent to the product and then zooms out to see the wider circles emanating from the product, all from the customer's perspective and point of view. In this way, Apple observes the system in its entirety.

The challenge for any company is how to bring together, from the many different voices and departments in an organization, a unified vision that leads to a cohesive product experience. Customers expect to have one fluid experience and not a disjointed mishmash of garbled messages and overlapping or indistinct points of view. How do you choreograph the disparate demands and priorities so the result is a holistic, systematic design that blends the critical touch points around the products and services?

Eliel Saarinen's mandate to design within a context is a good starting point. At my firm, we begin by asking our clients about their objectives in order to understand what the product is meant to be and what they hope it will mean to their customers. Identifying the right questions is often more important than designing the product. Questions help us zoom out to Saarinen's levels of larger and larger context. Our work with Palm Computing is a good way to illustrate how we ask questions as the first step to find a solution.

In 1996, Palm launched the PalmPilot, a first-generation, handheld personal digital assistant (PDA). Three years later Palm asked us to design a new product for the company. The project brief was simple: To gain market share Palm, wanted its lineup to include a new device at a lower price. The team at Palm told us that their market was mostly made up of mobile business professionals and that this new product would target that segment, too, but cost less than their other products that ranged in price from $250 to about $500. Palm explained its value proposition and unique design philosophy. Counter to what the Apple Newton and Microsoft's Windows CE were doing in the space, Palm had created an organizing principle called the “Zen of Palm.” Not surprisingly, the watchwords of Palm's creed were simplicity and ease of use. While rivals were trying to pack features into their PDAs, Palm expressly wanted to take features out. The result: Palm's handheld computers were faster and simpler, yet still packed a punch, with great functionality that people needed and appreciated while on the go.

Zooming out and considering the evolving context of the Palm market led to a new framework that positioned a new, low-end product in a formerly untapped consumer market space. Image: LUNAR

We immediately zoomed out to see where this new product would fit with Palm's other offerings. We posed this question: How will this new product relate to the other products in the Palm lineup? Saarinen would have been proud. The team at Palm unfolded their road map, which was a classic list of products plotted on a timeline. The road map included current products, their target “sunset dates,” and projections about products that were in development. One of the current products was the Palm V model. With its metallic shell and slim design, the Palm V was gaining in popularity with business executives for more than purely functional considerations. The Palm V was taking on a new meaning and evolving into a status symbol. It was attracting buyers who were interested not only in functionality but also in a golf-club, jet-set lifestyle. We asked more questions to get a better grip on the context of the market. What might a business customer want in a cheaper, stripped-down PDA? What is happening more broadly in the design of PDAs? How might Palm reach more customers with this new device? And zooming out even further, we wondered whether this new entrant at the low end would appeal to people's lifestyle choices rather than only to their business needs.

To help answer these questions, we reconstructed the Palm product road map in the shape of a target that described its product opportunities laid out in a two-dimensional market space. In the vertical direction, we plotted against the product price point. In the horizontal direction, we plotted how the product would be used: for organizing work activities at one end, or for ordering a customer's personal life at the other. Looking at the target, we realized that most of Palm's products were moderately expensive work tools, but the showy new Palm V was charting a new path as a pricey executive assistant, bridging professional and personal uses. At the bottom of the market space where the prices are lowest, the products—with their limited performance and lower cost—become more attractive to consumer purchasers rather than professional ones. What's more, there was no viable competitor occupying that rich, untapped space at the low end, where moms and students were the target customers.

This new framework helped define the context of Palm's products and inspired the team to design the Palm m100, a PDA that purposefully incorporated lifestyle cues to appeal to new customers. Its profile featured a rounded bottom and a graspable waist, attributes that gave the design a friendly and approachable look. Moreover, the m100 could be customized with personal expressions. Is that dark gray faceplate too boring? Too Wall Street? For $20 you can replace it with a sexier accessory faceplate covered in leopard spots. The model also had what we call “thumbnail equity,” meaning that even at the size of a thumbnail ad, the Palm m100 would be recognizable on discount store fliers that come in the Sunday newspaper.

Allow me to gloat here by saying that the m100 was a big hit in all the ways we had predicted, leading Palm chief executive Carl Yankowski to comment in a press release shortly after the product launch, “The volume in the global m100 launch was extraordinary…. [T]his product is reaching well beyond the mobile professional and early adopter. Early market research indicates we've tapped into the student population in a very big way.”³

The result of Palm's reframing was the m100, a product that appealed to students and moms. Image: Sandbox Studio

This product was so successful that Palm quickly adopted the two-market strategy and created two separate brands, Tungsten and Zire, to carry it forward. Tungsten was designed for the alpha crowd of bold productivity users and marketed with the catchphrase “Critical Work Gets Done.” Its sister brand, Zire, was heralded by the softer line, “Mom Gets Organized.”

CREATING EXPERIENCES

To better explain how companies zoom out, let me make a quantum leap from Saarinen's high modernism to IKEA, the global Swedish home-furnishings retailer that is known as much for its low prices and oddly named products as it is for the quality of its in-store customer experience.

Step into any IKEA store in Brooklyn or Kuwait or Singapore and you enter a world specifically designed to immerse the customer in the IKEA home decor universe. You snake your way along a predestined path, passing through meticulously arranged rooms where IKEA products—the sofa, the chair, the rug, and the bookshelves—are laid out as if a real person or family lived there. As you stroll by and visit these miniworlds, with the soft lighting and family photos on the wall and artfully placed objects, you see how these “people” live and how the IKEA products are part of their lives and contribute to their well-being. Products are placed in their context to help you understand the experience of IKEA living at your home.

In a similar way, Virgin Airlines has created a more pleasant flying experience, quite an accomplishment at a time when any air travel is pure drudgery. Virgin tries to minimize the pain with touches such as an amusing animated in-flight safety announcement and allowing passengers to order food and drinks via individual touch screens (attendants deliver the orders so trolleys don't clog the aisles). The pilot steps out of the cockpit to introduce the crew and deliver the predeparture announcement. There's little that can be done to relieve the general awfulness of a cramped seat and a crowded plane, but these touches do soften the rough edges of long-haul misery, because Virgin took the time to redefine the customer experience and everything that goes with it.

Virgin America uses design to create a comprehensive and differentiated customer experience, from this nightclub mood in their planes to the safety announcement video. Flight attendants on Virgin never slam the overhead bins. Image: Virgin America

It's a different ballgame, of course, with technology products, but the same design rules apply. First, you must see the world through the lens of the customer to discern needs (more about that in Chapter 6) and then create a product that addresses those needs. The experience follows. That might sound like a logical approach, but many companies routinely ignore it. Think about your own organization: Is product development based on a zoom-out view, taking in the context in which the product will exist? Or does the product sit alone and isolated, unconnected to a wider world of customer needs and expectations?

A company called Dropbox designed its software product, an Internet cloud service, using a very broad context. I discovered Dropbox while writing this book, because I needed a reliable way to back up my notes, manuscript, and book design concepts so they wouldn't get lost. As we all know, accidents happen.

Dropbox almost magically copies files from your computer onto a server at a remote location. This file synchronization happens in the background: The Dropbox software takes care of keeping the files updated—and even lets you know which files have been updated and which ones will soon be. If my computer were to be lost or destroyed (a very real possibility for an absentminded guy like myself), the files would be safe, backed up, and retrievable from any other computer.

The other ingenious thing about Dropbox is that you can access any stored files from other computers or devices, like smartphones and tablets. While on the road without my computer, I have pulled up the manuscript for this book on my iPhone. Impressed with the kind of gee-whiz technology that makes me feel like James Bond, I kept happily uploading big files, such as my notes and curriculum for the class I teach at Stanford, until I overflowed the limit of Dropbox's free storage offering. The time had come to consider signing up for the $10 Dropbox subscription to get more storage. But before doing that, I asked our IT group about other options.

“Look into Microsoft Windows Live Mesh with SkyDrive,” the tech wizards suggested. “They give you more space in their free version than Dropbox gives you in theirs, and it's more secure than Dropbox.” I decided to give it a try. Yet even before I fired up my Internet browser to give Live Mesh plus SkyDrive a test drive, a strange sinking feeling entered my designer brain. With that mocking Microsoft packaging video in mind, I asked myself: Why does a simple cloud service require five brand names (Microsoft, Windows, Live, Mesh, SkyDrive)? I was already feeling guilty for even thinking about abandoning Dropbox, with its short and punchy name.

Then a second warning flashed. Windows Live Mesh requires you to use that Windows Live account that you probably opened in 2006 to use Windows Messenger at work. What I learned next was that because I hadn't used the account in so long I didn't know that someone in Brazil had been pretending to be me on Windows Live. Being secret agent 007, I could work some magic with the software, and I managed to force a reset of the password to gain access. Next I downloaded the Windows Live Mesh program and installed it on my computer. I opened the application and, through some pretty simple steps, designated the folders I wanted to synchronize with SkyDrive (a pretty good name, I must admit, for a cloud storage system). As things started to sail along, my pessimism abated. A reasonable solution to my free backup challenge was at hand.

That hope was short-lived. Hours later, the application gave me conflicting reports on whether the sync had worked. In the meantime, I had installed the Windows SkyDrive app on my iPad. From the app on the iPad I couldn't view the files that I had synchronized with my SkyDrive account. I Googled for help and found an answer on Microsoft's website. Well, sort of. To my astonishment, I discovered that there are actually two SkyDrives: one that works with Live Mesh and another that you must manually push files to. The Live Mesh version is not accessible from the iPad app.

Let me recap: Two SkyDrives? Five brand names? A service that works on one device but not another? This was a design (and customer experience) nightmare. In a fit, I uninstalled the Live Mesh and SkyDrive software and went back to Dropbox, apologizing profusely to the company for my brief disengagement. I suspect that you have had similar encounters with a product or a service that just doesn't work and drives you batty with frustration. Back in the safe arms of Dropbox, my conclusion is that it's well worth it to pay a modest subscription fee for the simplicity and convenience of a well-designed software-based service to avoid the mental agony of one that is poorly designed.

Microsoft's cloud service is okay, or “just good enough,” because it works and backs up files to a virtual Internet-based storage system. But as its lengthy moniker suggests, Microsoft Windows Live Mesh with SkyDrive baffles and frustrates the customer. Unlike Dropbox, IKEA, Virgin, and, of course, Apple, Microsoft often can't see the forest for the trees when it comes to the customer experience. With the SkyDrive product, Microsoft failed to conceptualize the service through the lens of the customer.

Dropbox has proved to be a winner. As of 2012, it had signed on over 50 million users. According to a Forbes magazine story, Steve Jobs was so impressed with the service that he personally approached Dropbox founders Drew Houston and Arash Ferdowsi with an $800 million offer to buy the company.⁴ They turned him down. In 2011, Apple started its own Internet-based storage service with the fabulously simple name iCloud. It shifts the digital hub of your Apple system to the cloud from the PC, which had been the center for all things Apple, like the iPod and its digital music world.

Once again, we see the stark differences between the Apple and Microsoft design strategies. Microsoft tends to chase market share with any old thing it can get out the door, bugs and clumsy name and all; Apple aims higher, with the best-designed product and a rewarding and simple customer experience. And, as we have seen, the market share naturally follows.

PERPETUAL PLATFORMS

As long as we're zooming out, I'd like to take the discussion of context a step further, to the concept of designing platforms. Platforms are foundational products or systems that can be enhanced by either customers or other commercial partners.⁵ The personal computer is a platform. Facebook is a fantastic and durable platform, because it becomes a staging area for all of the things we share with our friends (and others). By using Facebook, we merge our lives with the platform, because the pictures and messages we post are part of the fabric of our social connections, and these are encoded in each friend's user list.

One can argue that Microsoft built a stronger platform in personal computers than Apple did because it established strong partnerships through its more open and flexible licensing model (compared to Apple's so-called walled garden). Even in 2012, the global share of Microsoft Windows based–PCs outpace Apple's Mac by 14 to 1.⁶ Microsoft's partners—from PC manufacturers to software application makers—have built businesses to work with the Windows platform, which in turn has led to a very strong business with an enormous installed base. In the Microsoft example, the platform enables the partnerships and the partners empower the platform.

When Jobs returned to Apple in 1997, one of his first public moves was to get Microsoft to endorse the Mac as a viable platform that it would continue to support. It was a surprising reversal for Jobs, who disliked Microsoft and was not usually one for changing. But it was an important signal to the world that the Mac would have partners contributing to the Mac platform. Despite Jobs's preference to control every aspect of the computer experience—integrating hardware and operating system and software—he must have realized that Apple needed customers to believe that the Macintosh would run a range of software that people wanted to use.

In fact, according to Randy Battat, an Apple marketing executive who worked there in the 1980s and 1990s, the original Macintosh struggled for a long time because it was unable to run a rich suite of applications. “The joke at the time,” Randy told me in an interview, “was that the Mac ran six programs: MacWrite, MacDraw, MacWrite, MacDraw, MacWrite, and MacDraw.” Jobs finally acknowledged the problem and let himself zoom out, knowing that he needed a platform approach to succeed and that rebuilding a relationship with Gates and Microsoft was the only way to go.

Jobs zoomed out again with the iPod and iTunes system. Because managing music on a small, portable device was awkward, Apple put more control of the music library and playlists on the PC in the form of iTunes, where people have a large screen, a keyboard, and a mouse to manage it all. Not unlike Facebook, this little system was starting to become a platform, because people began using it to manage all their music. Apple didn't stop there, of course. Jobs expanded the platform by signing deals with the major record labels to sell music through the iTunes store in a proprietary format. The foundation of the platform was customers using iTunes to collect music, build playlists, and enjoy their music in whatever way they pleased. Once you have your music loaded, located, and organized in the iTunes universe you're not likely to switch to another system. You are a happy camper, listening to your favorite tunes within the smoothly functioning iTunes universe.

Another blockbuster platform is the iPhone and the app phenomenon. In fact, the iPhone is the ultimate platform, because it is virtually a blank slate that customers personalize with the features and capabilities that they want most. With apps, that is. As you know by now, there are apps for everything under the sun, and each one creates another partnership with another company, which is helping Apple by deepening the customer commitment to the platform. Each app creates a stronger bond with the customer, because it further customizes the platform experience. It is now part of Apple lore that Jobs wanted the company to write its own apps and initially strongly resisted allowing outside apps to “pollute the integrity” of the iPhone, according to Isaacson. Looking back, it's a good thing (for Apple and for customers) that Jobs decided to open the iPhone to let it become a wider platform.

The platform idea is not limited to music and apps. Jeff Smith, one of LUNAR's founders, likes to think of the physical iPhone as a naked device that begs customers to adorn it with accessories that add individual expression or functionality. There is a huge aftermarket for cases, headphones, speakers, car chargers, credit card readers, docks, and more—all of which expand the universe of partners that support the iPhone platform. Once customers have outfitted their iPhone with music, e-books, apps, and perhaps a trendy case befitting a fashionista, they become more than customers. They transform into invested advocates of the product and context and platform.

SUMMARY

Insanely great products and services are the foundation of success at Apple and other companies. But products do not exist in isolation; they are part of an ever-expanding universe that emanates from the product to the context around it, and spreads from there to systems, experiences, and platforms that surround the customer and create loyalty to the brand. Designers orchestrate these experiences down to the smallest detail by zooming in to closely observe interaction with the product, and zooming out for a panoramic view of the wider context.

THE BUILDING BLOCKS

System design

helps companies zoom out to understand their products and services from an observational vantage point and then knit all the pieces together into a cohesive and compelling offering.

Creating experiences

is the result of companies zooming out to view the entire system of products in their larger context and designing a holistic response based on how the products fit into the lives, needs, and expectations of real people.

Perpetual platforms

are the ultimate product systems because they engage the market commitment of partners who contribute to the platform and the emotional investment of customers, which shifts them from customers to forceful advocates.

DESIGN LIKE APPLE AGENDA

Notes

1 “Sony promotes Kazuo Hirai to president and CEO, replacing Howard Stringer.” Wall Street Journal, February 1, 2012.

2 “Art: The Maturing Modern.” Time magazine, July 2, 1956.

3 “Palm, Inc. Earnings Report.” September 25, 2000.

4 Barret, Victoria, “Dropbox: The Inside Story of Tech's Hottest Startup,” Forbes, October 18, 2011, www.forbes.com/sites/victoriabarret/2011/10/18/dropbox-the-inside-story-oftechs-hottest-startup/.

5 This definition of platform was informed by a presentation I attended entitled “Finding Design Frontiers” by Larry Keeley of Doblin, Inc., given on May 17, 2008, at the annual meeting of the Association of Professional Design Firms. Keeley is a recognized leader in innovation methods.

6 From www.bgr.com/2011/10/03/ios-and-mac-os-x-market-shareshit-record-highs/.