Aligning Business And Customer Outcomes

Sébastien Fabre at UXDX Europe. Video: https://youtu.be/NcQMSMMZb-U

Readable transcript: edited from the recording's captions for readability (fillers and false starts removed, punctuation and section headings added). Wording is the speaker's own. Timestamps are positions in the video. Names marked [?] could not be verified against the audio.

Misalignment between business and user experience

[00:00:00] The discussion today was to present how we at LEGO align business and customer outcomes, and I would like at the same time to present a little bit how we do our work and do our job at LEGO. It's actually how the company is running. So I have a lot of slides and I will try to be as quick as possible. I'm already probably late on schedule.

[00:00:26] Very quickly, I was introduced. I worked a long time ago at Intel, I worked for Kodak, I worked for Orange, Fujitsu, and I joined LEGO about seven months ago. The reason why I wanted to mention that is because in any organization I have been working at, it's always been amazing to see the misalignment between business and the actual user experience of products. Intel had, for example, back in 2001 or something, a product called New Generation of Information Platform, a huge project, 40 million dollars. Internally we were calling this project "never going into production". At Kodak, well, you know the story.

[00:01:18] At Orange, I brought this screenshot because it was really a stupid thing. We had this launch of the very first set-top box, actually I think in Europe it was a big thing. Super design, super specification, super, well, everything was supposed to run smoothly. But then on the purchasing side they went to China and bought some elements to put the box together, and some guy found out that the red lights were cheaper than the green lights. So the first model was actually blinking red when it was working fine. So we got like, I don't know, millions of support calls from people complaining about the box not working. It was probably like a 0.001 cent difference from the green lights.

[00:02:21] So any company you go to, you actually see things. And Fujitsu, I guess, I don't know the number of times I had to explain that we're not doing digital cameras. So the brand was not as strong as the current company I work for, and the company I work for is the LEGO Group.

Who LEGO is

[00:02:44] Why is LEGO here today? I was a bit worried, wondering how you think about it. It's a bit strange to me, because a lot of people came to our booth and said, why are you here? But at the same time everybody finds it okay. I think we have a very strong brand, and I'd like to go a little bit into it, explain a little bit where we come from, how we foster this environment of work and this vision at every level.

[00:03:15] So LEGO is a family-owned business. It's been around since 1932. We are celebrating in a few years' time the 100 years of LEGO, and it's still the same family that owns LEGO. It was founded by someone called Ole Kirk Christiansen, in a very small place called Billund. It's still a very small place, but that's actually the headquarters of LEGO, and today you can still see the workshop where it all started. The place is also holding all the LEGO sets that were ever made by LEGO, and it's just opposite our brand new headquarters, a very modern building.

[00:04:02] We are the number one toy company in terms of revenue. We are in more than 140 countries. In fact we have hubs in Billund, Denmark, in London, in Singapore, in Shanghai and in Enfield in the US, and we have factories in Mexico, Czech Republic, Hungary, Billund and in China. I'm one of the 17,000 people working for LEGO. We have about 250 designers from over 40 countries, designing the sets that you know. And actually the company is renewing every year 60% of the products, so every year we need to innovate and put 60% of the products new on the shelves. And according to some survey, we are the number two reputable brand, so it means a lot to us.

[00:05:15] We have definitely a vision that we have had for a long time, which is to inspire and develop the builders of tomorrow. That's, I guess, what sets us apart from other businesses. We are definitely purpose driven and passionate about what we are doing. We feel like we have a mission, we have to teach children how to play, and we want them to grow and become adults through play. We think it's an important value, and we know that a lot of things happen through playing, so you learn a lot through that.

[00:06:05] So in 1932 the company started with the first wooden duck, it was actually not a brick. In 1958 the brick was created, and the brick from 1958 still fits with the bricks from today, you can actually still fit them together. In 1978 came the minifigures, and with the minifigures came a lot of role playing with it. In 1998 we created Mindstorms, which created a full generation of robotics experience and programming. And for those who don't know, LEGO comes also from a Danish term, it's a short reduction of the term leg godt, which is play well.

The 2003 turnaround

[00:06:54] The reason why I wanted to give that is because it hasn't always been blue sky for LEGO. In fact there was a turnaround happening in 2003. The company really was close to going bankrupt. There was a big issue, there was no clear strategy apparently anymore, we kind of became a little bit arrogant, I guess, at this stage, and we had to ask ourselves a lot of questions.

[00:07:27] The reaction that was made at that time was to create some partnerships, so you know most of them I guess, and especially the middle one. We also fostered user-led innovation, and I guess I don't need to explain too much of those projects. We have LEGO Ideas today, that is running very nicely. We release new sets. Fans, we call them AFOLs, adult fans of LEGO, have a huge community and they can actually propose new sets. We curate[?], and people can vote for it, and we will actually produce those sets, selecting those.

[00:08:16] We also had a much wider consumer touch point. So we went from having just the LEGO sets to also proposing games, movies obviously, and the parks and the shops. We're actually growing the number of shops worldwide a lot. Actually we are opening like seventy-five shops in China, physical shops. And we were also concerned that we need to treat the users as individuals, so some sets will have some specific features. For example, this set[?], you will have a unique plate number, and if you go to a LEGO account you will now have a VIP program that is with you as a person and not as any customer.

[00:09:13] I wanted to mention this book because it was mentioned to me by probably someone in the audience here, and I had a good read. And we also, probably the most important element in this turnaround, we also went back and met real users, like interviews on site with proper users. And it happened in Germany, there was a story you can read in this book that made LEGO realize that we need to go back to the basics and that we went a little bit far away. In fact, in 1997 this is the way the fire truck was looking, in 2001 it didn't even look like a fire truck anymore, and if you buy a LEGO set today you will get actually a proper fire truck looking set.

The 2022 plan and purpose at every level

[00:10:11] We have things ahead of us. What we want to do next is to reshape retail, digitalize play, and have more consumer engagement. We also have to take care of a global economic and demographic shift, and we also want to focus on the environment, which is obviously, for our company that's producing plastic, a big concern. This is our 2022 plan and it was set a long time ago, so we are nearly reaching it. And you can see that in terms of portfolio, get back into the innovator space, I think we did pretty well and we will keep on going this way. Take control of our own brand across generations, it's also quite an achievement from 2003. Geographic expansion, I explained that we are expanding massively. And on my side, I'm more on the enablers side, so ensure a future-proof foundation.

[00:11:14] I think it's important that, it's a legend story[?] and it's been used like a hundred times, but I think it illustrates quite well how we actually are a purpose driven company. At LEGO, anyone in the company feels like they know what they are here for, they know what the company is doing. And I think it was used by Facebook also, this quote.

[00:11:49] So what we have behind is a LEGO brand framework, and you can google it and find it, so it's nothing confidential, where we have a mission, aspiration, promises, spirit and values. And on the promises part I would like to also show you an example of how we do the planet promise. 25 percent of the ownership of LEGO goes to the Foundation, where we actually do a lot of charity work and help refugees, for example, in camps. We have our local community engagement, helping worldwide eight hundred and forty thousand children in 26 countries. We use a hundred percent renewable energy already, and as of today we are already producing 80 elements out of non-plastic ingredients, like plant-based things. So we're not quite there yet, but we have promised to be there by 2030.

Business technology, and how we organize products

[00:13:02] I'm actually part of a department at LEGO called business technology. You saw the mission that the LEGO Group has, and at my department level, business technology level, so what you would traditionally call IT, we also have a mission, and you will see that we have that at every level in the company, down to the product level. So our mission in business technology is to maximize the value from the LEGO Group's technology investments. And we do that working in an agile way, so my boss, the CIO, is the product owner, and we make sure that we deliver things on a sprint basis.

[00:13:48] We created recently, for example, a new version of our product line catalog, so that everybody at LEGO can look at what we are doing, what we are promising to the organization, who's owning what, and what technology we are using for that. On our side we also make sure that we have a meaningful way of organizing those initiatives and products. To give you an idea, we probably have about 190 products currently in the IT product line catalog. And we make sure that there is always a team behind a product, that one team manages at least one product. There are two products per product line, because we organize also by product lines. Those products should make sense for the business, talking about the alignment with business. Products that mirror what the customer can buy, and those products do not mirror how we are organized. That's also quite important.

[00:14:59] And to give you also a little bit of an idea of how we report success of this organization up to the executive leadership team, we also put our value creation, so our outcomes, based on those four quarters: how did we help the organization driving demand, innovate for the future, maintain the foundation, and energize everybody every day. That's another aspect that I will come back to later.

[00:15:31] I'm a senior director in charge of the UX, mobile and portals team. We also have our team and organizational level. We say that we enable other product teams to succeed in implementing the right UX and UI in their products, by providing the platforms, tools, techniques and guidelines. We own our own products. It's just a few, I could not really cover all of them, but I'm happy to tell you that we own the UX Partner Program, the UX Academy, the enterprise UX platform, internet experience, the service portal experience, web solutions and so forth. So we actually help LEGO employees to do that job.

[00:16:21] We are supporting all the applications for enabling the company to run the factories, to run the shops, LEGO brand retail stores, but also the employee applications for HR, for procurement and so forth, and for the internet, which is quite a lot. And the team is actually working hard but also having fun, so this is the team at work and the team at the offsite that we had, the last one we had in Denmark a few weeks ago.

Outcomes and business value

[00:16:57] So now I wanted to give you this introduction about LEGO, and I wanted to give you a definition, my definition, of how we see our outcomes. So an outcome for me would be a measurable change in human behavior that creates value.

[00:17:23] And then the next thing, I think, to get started in the topic, would be to tell you also what I see as business value. And I can recommend this book from Mark Schwartz. He's now working for Amazon AWS, he used to work for the immigration service in the US, in a twisting position, and he actually introduced DevOps. What Mark Schwartz is telling us is that business value is not a simple formula that is somehow known by the business, and that it's something that should be discovered, and not discovered only once but investigated on a regular basis. So have a cycle of investigation, making sure all along that we are not going in the wrong direction. And I like this sentence, it says that if you want to talk about business value, you will say that the business values business value.

Follow the twelve agile principles

[00:18:20] So I put it into ten things that I think matter. There were a lot of presentations about this over a couple of days and I don't want to go too deep into some specific topic. If you want, for example, information about the design sprint, you can google it, you can find a lot of stuff, case studies or things that were already published by LEGO not so long ago. So, things that are a little bit complementary to what has been said.

[00:18:55] The first thing would be to follow not some, but the twelve agile principles. I think it's important to keep that in mind, because you will probably think in terms of being agile, deliver frequently. It's not all. It's doing a job, it's not like being agile, and there are a lot of other principles to take care of, especially reflect and adjust. And I think it's worth mentioning, probably as the very first recommendation, if you do scrum you will also have to bear in mind that scrum doesn't really tell you what to build, it tells you how to build.

Start with a vision, and use OKRs

[00:19:48] Number two would be, start with a vision. I gave you the introduction about LEGO because I wanted to make clear that we need a vision at every single step, down from the top of the organization to the business, to the product level. And Jared Spool, which I follow, quite a nice guy to follow, says to us that he believes that design should be translated into at least one of five business goals. So it's like increasing revenue, decreasing cost, increasing the money you bring in from new customers, increasing the amount from existing customers, or increasing your overall long-term shareholder value. He tells us that in every business you should actually follow business goals, otherwise what you're doing is just wrong.

[00:20:48] I was happy to see this morning that someone mentioned OKRs. Use OKRs, they are really valuable, and it wasn't mentioned in presentations I attended yesterday, I was a bit surprised, but it's actually a very powerful tool to make sure that you are always aligned with the outcomes that you want to deliver. And why is it like that? It is because it allows you to measure progress, it shows how far along we are towards a desired business outcome. But I don't want to talk about OKRs too long, so I assume that you are fine with just mentioning that OKRs, and there's also a lot of documentation to do OKRs yourself.

[00:21:41] What you can do is to define also a product vision. But if you prefer doing it in a more fun way, you can also do a vision drawing. That would be the kind of drawing that we would be using, for example, in our factory world, so not the most fun place, you can imagine, but they actually do it in a very fun way, by putting this vision into a drawing. You can also use this kind of template to put what you are actually bringing to the business into a poster format, and get it into your product mission.

Do the right research

[00:22:31] I think one of the key things to perform is the right research, and I have decided to take some examples not from the software world but from the actual product world. So we have a department at LEGO called the digital product team, DPT[?], and that's the way they work to come up with, for example, a full concept. They put the brand, the business, market, the user, the interaction, the design and technology, and they will only go ahead with a full concept when they have covered every one of those elements, and not everyone individually but in combination.

[00:23:25] You will be first scouting for the technology, for example, mapping the options that are available to you, and you will look into the relationship between, for example, the cost and the volume, or the planet promise. Is the brand value okay with the planet promise that we want to offer to customers? Is it a combination of cost and business? Okay, or really, will it have an impact? So you will probably have some iterative way of producing a concept together that will not be fully valid yet, and you will have to adjust different parameters to make it become a proper concept.

[00:24:24] And one thing that this department is very good at, and we really like to learn from them, is the reusability thinking of things. So they will also only develop a concept when they think that some of the stuff that they develop is actually reusable.

Anticipate needs: the DUPLO train and the Batmobile

[00:24:43] And that brings me to the next recommendation, which is anticipate needs. Try to think broader than the project that is on the table at the time. This is the Batmobile, and this is what happened. There was a project called the DUPLO train. They got briefed, they were to develop a DUPLO train for a specific product team, and it had to be ready and be released, and all the money or the budget they were getting was just for the DUPLO train.

[00:25:18] And they anticipated, and some of you I guess got an explanation about the way it was working. They anticipated the coming needs by thinking, okay, today we get the DUPLO train, what could happen next? We only have these possible options: there will be some vehicle requests coming. But how many types of vehicles can we think about? There are not just only a few. So you will have a train, a car, a tank, a boat, and maybe a functional element vehicle.

[00:26:04] And it took them a bit of time to come up with a DUPLO train, but when the DUPLO train was released, they were able to actually welcome any new request, any new product, and reuse the same remote control. So with a train you just have to press once and it will just go on and keep running, that's what you expect from a train. And you will also plug lights, and that's also what you expect from the train, that it is making some nice lights, if you use the same component, the same element here.

[00:26:44] And plug a motor for a car instead of the block that you need for the train, you can reuse the same remote, you don't need to do anything else, but when you press the remote and release it, the car will start and stop. And if you have a tank, you have to put like two engines, one on the left side, one on the right hand side, so you really need it, because if you just press up on both sides your tank will start spinning. So this remote will actually allow you to turn it around, and you can pilot, as a child you can pilot the tank in a very natural way.

[00:27:27] The reason why I'm mentioning that is because all of this thinking was not done later, it was done at the stage where they had just got on their table a request for a train. And this fantastic team did a tremendous job and was thinking forward, and when the other request came in, the Batmobile, they were laughing, they were like, hey, we've got everything, we have all the elements ready, we just need to customize a little bit of things. And within weeks they were able to release the Batmobile. Super return on investment, fast to market, excellent example. And we try to do the same in our way in the software department: we don't write any single line of code without thinking how can we reuse it.

Brave, curious and focused

[00:28:16] The next thing would be to be brave, curious and focused. Our role models at LEGO are kids, and we really want to not forget how kids are thinking and how they behave. We want to also have those values, think about them. So being curious, for us, means to run experiments, to do A/B testing. Being focused would be to reflect on what you've done and prioritize the right things. And being brave would be to be able to say no and stand for what you really believe is good. It's important that everybody in the company feels they can do that, so that's what we also name and call energize everybody every day, because it's something we want to reflect on on a daily basis.

[00:29:19] Another one would be to think out of the box, and we promote something called mindfulness. That's something that a lot of other IT companies I know already do, but that's helping a lot actually. The idea behind it is that when you graduate you're a super engineer, but you're an analyst, and you can actually deliver things, you completely forget to be creative, to be innovative. And bringing this mindfulness in the company allows you to actually become more creative and more innovative. It also helps with something else: it's like 47 percent of the time your mind is actually somewhere else, and it helps you, with just a little few exercises during the day you can actually train and try to get more focused on what you're doing and become more efficient. There are even some meetings that start with mindfulness now, and they waste time with mindfulness at the start, but they realize that they actually finish their meetings earlier than they used to.

Think big, start small, and team diversity

[00:30:29] Think big, start small, that would be the MVP way. Team diversity: we really have very international people and different skills. The product teams should also have a broad range of people worldwide, of kids. And we promote something that we call the LEGO of our ego, that we also as a team think in terms of what is best for the company and not for myself.

UX partnership and the UX Academy

[00:31:10] In our department, the UX, mobile and portals department, we also do something that we call the UX partnership, and the UX Academy. The UX partnership is the idea of having a consultant in the team talking to a senior or a director in different departments, and helping them derive some strategy around UX. We're not enough to cover 190 products, but we can do something in terms of making sure that all the processes are actually thought about, and that we can answer questions, address specific needs at a higher level.

[00:31:53] And we complete it together with something that we call the UX Academy, where our UX consultants take a bit of their time to teach and train people within the product teams across the BT organization. They will set up a 25-week-long curriculum with having a mentor, so they will be available for specific people in product teams, they can reach out. Those people will have assignments to do during a cycle of two weeks' time, and we hope that most of the basic UX activities, put to work, can actually be performed even when we're not there and involved directly on site with the product team. So there will be someone in each product team capable of carrying the torch and performing basic user interviews, user testing and this kind of activities that we think are key. The feedback is actually pretty good and we get more and more trainees.

The three gaps model

[00:33:16] And the last one would be the continuous delivery pipeline, but if I had to talk about this topic, and we're already over time, it would be probably another hour. So to sum it up, I want to say that to get this alignment done we need to get a lot of transparency, we need to share the purpose and take time and use the canvas, use this vision exercise to actually align on what it is you want to achieve. Make sure that you get feedback loops, that you are not losing track and you can validate what you think is good. Have clear priorities, and have this organizational learning behind, which I just explained in the last slide, which is maybe the most heavy way of finishing, the foundation, because this one is simple.

[00:34:04] I thought that it would be also quite interesting to illustrate it with this three gaps model that comes from Stephen Bungay. Bungay explains that there is a knowledge gap, that is the difference between what we would like to know and what we actually know. There's an alignment gap, the difference between what we want people to do and what they actually do. And there is another gap called the effects gap, that is the difference between what we expect our actions to achieve and what we actually achieve.

[00:34:42] And the regular reaction to that would be to say, okay, it's simple, for the knowledge gap I will just bring some more documentation, or for the alignment gap I will just make sure that people do that job, I will make more strict rules and more processes in place. And for the effects gap, the action against outcome, I will just have a dictator in place and make sure that the manager is telling people what to do. But we actually think that it's the other way. You should think that you should go in an explorative way, motivate people, be definitely customer focused and driven by achieving outcomes.

[00:35:29] So to address this knowledge gap you will actually validate through experiments, you will treat your customers, I mean, you will consider your users as your customers. For the alignment gap you will actually provide clear direction and priorities, invest in competencies, do small increments and get feedback early. And for the effects gap you actually measure on outcomes, not on output. Thank you.